In recent times there has been an explosion in the availability of what are known as sub prime mortgages, with as many as 4,000 different products and a variety of fixed, variable and discounted rates available. Sub prime lending is the fastest-growing segment of the UK mortgage market, accounting for about 10% of the £300 billion sector in 2005. The rapid growth in the sector has led to fierce competition and a price war has erupted where lenders are keen to get the business of people with adverse credit history. As a result the interest rate differential between non standard sub prime and mainstream mortgages has narrowed.

Generally, you should be able to obtain a better mortgage rate by going through an independent mortgage broker, rather than direct to a provider as they have access to the entire market and can advise you on the products most suitable for people in your situation.

There are different levels of mortgages available to people with a poor credit rating. Someone who has missed a couple of mortgage or loan payments in the past will often be regarded as "near-prime" or "light adverse" and will pay a slightly higher rate of interest when compared with standard rates. Someone who has a very bad credit rating as a consequence of being a discharged bankrupt or having a lot of county court judgements against them will be charged a higher rate of interest because the borrower will considered a more risky bet.

If you have a CCJ or have missed a payment occassionally do not automatically assume you cannot get a mainstream mortgage, as some lenders will accept some small "minor debt".

Once you have been with your lender for two to three years and have a solid track record of keeping up with repayments, you should be able to switch into the mainstream market, where interest rates are lower.

Use the search facility above to find expert brokers who can assist with mortgage applications from people with bad credit history.