Purchasing a home after bankruptcy

After multiple defaults, the enquiry we receive the most is about the ability to purchase a home after bankruptcy. I have made a few posts on this in the past but with the world as it is and lot having changed over the last 12-18 months I thought it would be worthwhile making an updated post on the subject.

Under 1 year discharged from bankruptcy

With less than 1 year discharged your options are very limited. There are maybe a 3-4 lenders who will consider it. However, rate wise you are looking at probably 8-12% and a 30-40% deposit. I think it is one of those things where it may be possible but the requirements and cost are going to put off the majority of people.

Over 1 year discharged

Not a lot changes at this stage. You are still generally limited to the same options above. However it will likely be a shorter pain threshold. If you were to do a 2 year fixed rate, when you come out of the that deal you will have been discharged for 3 years and at that point things change. There is more information in the 3 year discharged section.

Over 2 years discharged

Again, not much changes here. There is an extra 1-2 lenders who can take a view on it. Again, maximum LTV will be low, probably around 60-70%. Rates will generally be the same as above, unless you can get it with one of the new lenders and you might start to see something in around 6-7% marker.

Over 3 years discharged

This is where things really start to change. At 3 years discharged there are a couple of high street lenders who kick in. There are a group of building societies who are also happy to consider bankruptcies over 3 years old. All of a sudden we are starting to look at normal rates and at the higher LTVs – 90%, maybe even 95%. Although that is tricky at the moment as there are not too many 95% products available in general.

Over 4 years discharged

As far as I am aware nothing changes in terms of products available at this anniversary. It would still be the same as above. Although you would like to think that your chance of acceptance would improve as you are another year discharged. Also similar to the one year discharged, if you were to take out a 2 year fixed rate now by the time that deal finishes the bankruptcy would have dropped off your credit report.

Over 5 years discharged

There are a couple of lenders we use occasionally who works on things slightly differently, they go off the registration date of the bankruptcy rather than the discharge date. They need 6 years from registration. As most bankruptcies are for 12 months, this probably means you might have another couple of normal lenders open to you at this stage.

Besides those couple, I think everything else remains the same as the 4 years discharged. In the real world probably very little will change, but every extra option helps to improve upon the products potentially available to you.

6 years discharged

This is the big one. At this point everything drops off your credit report. You will very likely have 99% of the lenders available to you. The exceptions would be certain lenders who hold internal reports going back much further. If they were part of the bankruptcy they still may be an automatic decline. In that case those lenders would still need to be discounted.

Extra things to consider:

There are a couple of lenders who can take a view from day 1 discharge. But you have to pass a credit score. If you have a reasonable deposit and have gone bankrupt over say a tax bill that may not be on your credit report you might get lucky. If you have gone bankrupt due to multiple credit card debts then realistically that is unlikely to pass.

Who was involved in the bankruptcy. It is always worth having a list of creditors as this can help with looking at the pool of lenders. We may need to discount some lenders on that list.


We can potentially help you purchase a home from day 1 of being discharged from the bankruptcy. However where that is the case, sometimes you need to weigh up the cost and try to find the large deposit needed. At some point there is usually a cross over (typically the 3 year discharged mark) where all of a sudden the rates and deposit needed come down to a point that stops it being prohibitive. But there are exceptions where we can help before that.

As ever, it is always worth a conversation. You never know and in an ever evolving market there may be something that is not available at the time of writing this article.