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Fixed rate mortgage with bad credit
If you have a bad credit history or bad credit and want a fixed rate bad credit mortgage deal this information should be useful. We have searched the market and noted down some common factors relating to fixed rate mortgage deals for people with a poor credit history. Whilst this is not exhaustive or specific to any one lender, it should give you a guide as to what could be available to you depending on current market conditions.
What will a fixed rate bad credit mortgage deal do for me?
A fixed rate bad credit mortgage deal will mean the interest rate stays the same over a set period of time, for example this could be a 2 year fixed rate deal or a 3 year fixed rate deal. In these instances the mortgage payments will remain the same for the deal period - 2 or 3 years in the examples above. A fixed rate mortgage deal for people with a poor credit history will 
mean the monthly mortgage payments remain the same for the deal period which will help with budgeting as the borrower will know exactly how much money they are paying out to the mortgage each month.
A number of fixed rate mortgage deals for people with bad credit we looked at also included various incentives such as free valuation and no up front lender arrangement fees which will benefit a borrower looking for a fixed rate mortgage deals for people with bad credit as it helps keep initial costs down, the money saved by the borrower can then be used for other things such as legal fees or moving costs.
We also found a number of lenders have fixed rate remortgage deals for people with bad credit and were offering free legal fees for bad credit remortgage deals. Again this will save the borrower money which the borrower can use elsewhere.
What will a fixed rate bad credit mortgage deal allow
The fixed rate deals we looked at allowed a mixture of defaults, county court judgments (CCJ'S) and mortgage arrears.
The amount of defaults and county court judgments etc they will allow varied depending on the lender and mortgage product but every fixed rate mortgage deal for people with bad credit we looked at allowed at least defaults and a number of them allowed a mixture of CCJ's defaults and arrears which is good news for people with lots of bad credit. The fact that the interest rate is fixed will also make the payments more manageable as the monthly payments will stay the same.
A number of the deals we looked at even ignored defaults all together which means they will not be taken into consideration for underwriting purposes for that specific mortgage.
There was also a variety of ways in which lender would work out affordability for fixed rate mortgage deals for people with poor credit history. These include income multiple (for example, three times your joint income) and some used affordability calculations where they looked at your income and outgoings and, depending on the lenders own criteria they will work to a formula which will result in the mortgage payment either being deemed affordable or not.
How can a fixed rate bad credit mortgage deal help you?
As mentioned above a fixed rate mortgage deal means the monthly payments will be fixed for a specific number of years. This makes budgeting very easy as you will know exactly how much you have going out each month. Even if the bank base rate or lenders variable rate changes your fixed rate deal will not - this can be a bad thing if the lender you have your fixed rate mortgage deal for bad credit drops its standard variable rate below the rate of interest your mortgage is fixed at, as your payments will be fixed you will not benefit from the drop in interest rates. This however is usually seen as a small price to pay (if interest rates drop at all) as many people do not want to take the chance of having their payments going up so a fixed rate deal suites them better.
