What Is a Subprime Mortgage UK?

A subprime mortgage (called 'adverse credit' or 'specialist' mortgage in the UK) is a mortgage for borrowers who don't meet standard lending criteria. This includes people with credit issues like CCJs, defaults, or IVAs, self-employed with complex income, or those with non-standard circumstances. They carry higher interest rates (typically 1-4% above prime rates) and require larger deposits (15-25%).

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Are subprime mortgages available in the UK?

Yes, though they're usually called 'adverse credit mortgages' or 'specialist mortgages' in the UK. Following the 2008 financial crisis, regulation tightened significantly. Today's UK subprime market is heavily regulated by the FCA, with strict affordability checks. Responsible lenders serve borrowers who mainstream lenders won't.

Who qualifies for a subprime mortgage?

People with credit issues (CCJs, defaults, IVAs, bankruptcy), self-employed with complex income, those with limited credit history, or borrowers with other non-standard circumstances. You'll typically need a larger deposit and will pay higher rates than prime borrowers.

Are subprime mortgages more expensive?

Yes, subprime mortgages have higher interest rates than prime mortgages - typically 1-4% higher depending on credit severity. This reflects the higher risk to the lender. However, as you make payments and credit improves, you can remortgage to better rates, often within 2-3 years.

Is subprime lending safe after 2008?

UK subprime lending today is much safer than pre-2008. The FCA requires lenders to conduct thorough affordability assessments. Irresponsible lending practices that caused the crisis are now illegal. Today's subprime market helps underserved borrowers access homeownership responsibly.

What deposit do I need for a subprime mortgage?

Typically 15-25% for subprime/adverse credit mortgages, compared to 5-10% for prime borrowers. The more severe your credit issues, the larger deposit you'll need. Higher deposits reduce lender risk and can help access better rates even with credit problems.

Quick Answer

What Is a Subprime Mortgage?

Last reviewed: December 2025

Reviewed by Jay Sabine – CeMAP Qualified – 29 years experience

A subprime mortgage is for borrowers who don't qualify for standard 'prime' mortgages - usually due to credit issues. In the UK, these are called 'adverse credit' or 'specialist' mortgages and are strictly regulated.

Subprime mortgages serve borrowers who fall outside mainstream lending criteria. In the UK, the term 'subprime' is less commonly used than 'adverse credit' or 'specialist' mortgages, but they mean the same thing. These products exist because not everyone has a perfect credit history or standard employment situation, yet many are perfectly capable of maintaining mortgage payments. The UK subprime market is now heavily regulated by the Financial Conduct Authority (FCA), with strict affordability assessments required by law. This makes today's subprime lending much safer than the pre-2008 market that contributed to the financial crisis.

Your home may be repossessed if you do not keep up repayments on your mortgage. Subprime rates are higher - consider if affordable long-term.

Key Points

1For borrowers outside mainstream lending criteria
2Called 'adverse credit' or 'specialist' mortgages in UK
3Higher rates (1-4% above prime) and larger deposits (15-25%)
4Heavily regulated by FCA with strict affordability checks
5Includes CCJs, defaults, IVAs, complex income situations
6Can remortgage to better rates as credit improves

Eligibility Criteria

Credit issues that mainstream lenders won't accept
Self-employed with complex or irregular income
Limited or thin credit history
Non-standard property or circumstances
Still must pass FCA-mandated affordability assessment

Typical Timeframe

Subprime mortgage applications may take 4-8 weeks, sometimes longer if manual underwriting is required. Building credit to move from subprime to prime rates typically takes 2-3 years of consistent payments and credit improvement.

Next Steps

1Check your credit reports with all three agencies
2Understand what's causing your subprime status
3Calculate your available deposit
4Speak to a specialist adverse credit broker
5Plan your route to prime rates over time

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What Is a Subprime Mortgage?

Key Points

Eligibility Criteria

Typical Timeframe

Next Steps

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Eligibility Criteria

Typical Timeframe

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Related Questions

Prime vs Subprime: Key Differences

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