Buy to Let • Bad Credit
Defaults on your credit report can make borrowing tricky — but Buy to Let is still possible. The key is how recent and how large the defaults are, your deposit size, and whether the rental income comfortably covers the mortgage.
Shortcut: See our full guide → Buy to Let Mortgages with Bad Credit.
How Lenders View Defaults
- A default happens when missed payments lead a lender to close the account.
- It stays on your credit file for six years, even if later repaid.
- BTL lenders focus less on score than residential lenders — but they still assess risk.
| Factor | Why It Matters |
|---|---|
| Recency of default | Defaults within the last 12 months make approval harder; some specialists may still consider. |
| Size of default | Small (e.g., £200 phone bill) vs large (e.g., £5,000 loan). Larger = tougher. |
| Number of defaults | One or two is easier to explain; multiple looks riskier. |
| Rental stress test | Lenders check rent covers mortgage payments at 125–145%. |
| Deposit size | Bigger deposit reduces risk — think 25–40% for adverse BTL. |
Can You Get a Buy to Let Mortgage with Defaults?
- Mainstream lenders: Usually decline if defaults are on file.
- Specialist lenders: Will consider if defaults are older/small, your deposit is strong, and rent covers the mortgage.
Case Studies
Case A — Recent Small Default
Alan had a £350 mobile default 9 months ago. With a 30% deposit and strong rental cover, a specialist lender approved his application.
Case B — Larger Historic Defaults
Priya had two loan defaults from 2018 totalling £6,000. As they were over five years old and she had a 40% deposit, a building society accepted her case.
How Much Deposit Do You Need?
- Standard BTL: 25% deposit is common.
- With bad credit: Expect 30–40%.
- Bigger deposits usually mean better rates and wider lender choice.
Related reading: How much deposit do I need for BTL with bad credit?
Practical Steps to Improve Approval Chances
- Check your credit report — confirm defaults, dates, and amounts.
- Settle where possible — “satisfied” looks better than “unsatisfied.”
- Prepare rental evidence — agents’ letters/ASTs for stress testing.
- Build a bigger deposit — 30–40% strengthens your case.
- Use a broker — many accepting lenders are broker-only.
“I thought my defaults would stop me becoming a landlord. Honest Mortgages found a lender who accepted me with a 30% deposit — now I own my first rental.”
Check all three credit files in one place
Use our partner link to view your data across agencies. This won’t harm your score.
FAQs — Buy to Let with Defaults
Can I get a Buy to Let mortgage if I have defaults?
Yes — specialists may accept depending on age, size, and deposit.
Do defaults need to be settled?
Not always, but settled defaults are easier to place.
Will high street banks accept defaults?
Typically no — you’ll need a specialist lender.
Do I need a bigger deposit if I have defaults?
Often yes — 25% is the minimum, but 30–40% improves your chances.
Does the type of default matter?
Yes — small consumer defaults (e.g., phone bills) are easier than large loan defaults.
