Bad Credit • First-Time Buyer
Defaults don’t end your chances of homeownership. With the right deposit and lender, you can still get a mortgage as a first-time buyer — sometimes even with just 5% deposit.
Shortcut: Full guide here → First-Time Buyer Mortgages with Bad Credit.
What Is a Default?
- When a credit account is closed by the lender due to missed payments.
- Stays on your file for six years from the default date.
- Some lenders may still ask if you’ve ever defaulted, even after it drops off.
Can You Get a Mortgage with Defaults?
- When: Older defaults are easier to overcome.
- Amount: Small defaults are less serious than large ones.
- Type: Non‑mortgage defaults (like mobile bills) are treated more lightly.
- Settlement: Not always essential, but helps.
- Deposit: Bigger deposit = more lender flexibility.
Some lenders even accept defaults within the last 6–12 months, depending on size and type.
How Lenders View Defaults
| Default Age | Chance of Mortgage Approval |
|---|---|
| < 12 months | Tough, but some lenders may consider small defaults. |
| 1–2 years | Limited options unless deposit is large. |
| 2+ years | Some lenders may accept with 5–10% deposit. |
| 3–6 years | Wider range of specialist lenders open. |
| 6+ years | No longer shows on file. |
Deposit Requirements with Defaults
- Standard buyers: 5–10% deposit.
- Defaults 2+ years old: Possible with 5% deposit.
- Recent defaults: Usually 15–30% deposit required.
Related: How Much Deposit Do First-Time Buyers Need with Bad Credit?
Which Lenders Accept Defaults?
- High Street Banks: Decline if defaults are visible.
- Specialist Lenders: Flexible with larger deposits and clean recent history.
- Some accept non‑mortgage defaults over 2 years old with as little as 5% deposit.
Case Studies
Recent Small Default
Chloe defaulted on a £300 phone bill in 2023. With a 20% deposit, she secured a mortgage from a specialist lender.
Older Defaults with 5% Deposit
Ryan had two defaults from 2020. By 2024, they were over 2 years old, and he secured a mortgage with only a 5% deposit.
Practical Steps
- Get your credit report — check all defaults and dates.
- Save bigger deposit if defaults are recent — 15–30% may be needed.
- If defaults are 2+ years old — 5–10% may be enough.
- Settle defaults if possible — it helps.
- Use a broker — to access lenders who accept defaults.
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 – First-Time Buyers with Defaults
Do I need to settle my defaults before applying?
Not always — but it strengthens your application.
Can I get a mortgage with defaults less than a year old?
Yes — but only with certain specialist lenders and a large deposit.
Can I get a mortgage with just 5% deposit and defaults?
Yes — but only if defaults are 2+ years old and the rest of your case is strong.
Do high street banks accept defaults?
No — you’ll need a specialist lender.
Will defaults stop me forever?
No — they drop off after 6 years.
Further Reading on First-Time Buyers with Bad Credit
Getting a Mortgage as a First-Time Buyer
Deposit Requirements for First-Time Buyers
Government Schemes for First-Time Buyers
Improve Your Chances of Approval
Finding Lenders with Bad Credit
Mortgages After IVA
Mortgages with a DMP
Mortgages with Defaults
Mortgages After Bankruptcy
Remortgaging with Bad Credit
95% Mortgage Options with Bad Credit
