Yes, missed payments can affect your mortgage application. But they don’t always prevent you from getting one. It depends on what you missed, how long ago it was, and how the rest of your finances look.

This article examines how lenders view missed payments, what they consider, and how you can improve your chances. If you’re worried about your specific situation, always speak with a qualified broker who can provide you with professional guidance.

How do late payments impact a mortgage application?

When you apply for a mortgage, the lender checks your credit report. This shows your payment history across all your credit accounts, including credit cards, loans, mobile phone contracts, and utilities.

A missed or late payment is recorded on your credit file. It stays there for six years. During that time, any lender who checks your file is able to see it.

Lenders use this information to assess risk. A missed payment signals that you’ve struggled to meet a commitment in the past. This makes some lenders cautious about offering you credit.

But lenders also look at context. A single missed payment on a mobile phone contract from three years ago is treated very differently from recent mortgage arrears. The type of payment, how many were missed, and how recently they occurred all matter.

The key factors lenders consider are:

  • Type of payment. Missed mortgage or secured loan payments are viewed more seriously than a missed utility bill.
  • How many were missed. One missed payment is less serious than several in a row.
  • How recent they are. A missed payment from five years ago carries less weight than one from six months ago.
  • Whether they were resolved. Payments that were brought up to date quickly show you dealt with the problem. Ones that were left to become defaults or CCJs are more serious.

 

Do all lenders reject applications with late payments?

No. High street lenders tend to have strict credit scoring. They often decline applications that don’t meet a minimum score. A missed payment can push you below their threshold.

Specialist lenders take a different approach. They look at each application in more detail. They consider why the missed payments happened and what has changed since. If you had a difficult period, but your finances are now stable, a specialist lender may still be able to help.

The right lender for you depends on your specific credit history. A specialist broker can tell you which lenders are likely to consider your application before you apply. This is important because every full application leaves a search on your credit file. Too many searches in a short time can make your credit profile look worse.

For more on what is possible with adverse credit, read our guide on getting a mortgage with adverse credit.

What other factors affect my affordability?

Missed payments are one part of a lender’s assessment. They also look at a range of other factors:

  • Income. Lenders check that your income is enough to support the mortgage payments. They look at how stable and verifiable your income is.
  • Existing debts. Your monthly commitments, such as loans, credit card minimums, and hire purchase agreements, are taken into account. High existing debts reduce how much a lender will offer.
  • Deposit size. A larger deposit reduces the lender’s risk. This can work in your favour if your credit history is imperfect.
  • Employment type. Lenders prefer stable employment. Self-employed applicants may face more scrutiny.
  • Overall credit history. One missed payment alongside a generally strong credit record is treated differently from a pattern of missed payments across multiple accounts.

 

How will a mortgage lender know if I’ve made payments late?

Lenders carry out a credit check as part of any mortgage application. This gives them access to your full credit report, compiled by credit reference agencies including Equifax, Experian, and TransUnion.

Your report records every credit account you hold or have held. It shows the payment history for each one, going back six years. Any late or missed payments are marked with a status code that shows how many months behind the payment was.

Lenders cannot miss this information. Even if a missed payment was small or felt minor at the time, it’ll be visible on your report if it was recorded. This is why it’s important to check your own credit report before you apply, so there are no surprises.

Understanding your credit report

You can check your credit report for free using services from Experian, Equifax, and TransUnion. It’s worth checking all three, as lenders may use any of them.

When you check your report, look for:

  • Errors. Mistakes on credit reports are more common than people realise. If something is wrong, contact the credit reference agency to dispute it. Corrected errors can improve your score.
  • Outdated information. Most negative marks, including missed payments and defaults, are removed after six years. If something older than this is still showing, it shouldn’t be there.
  • Accounts you don’t recognise. Unfamiliar accounts can be a sign of fraud. Report them immediately.
  • Financial links to others. If you have a joint account or mortgage with someone who has poor credit, it may affect your own profile. You can apply to have these links removed if the relationship has ended.

 

Understanding what’s on your report helps you know what a lender will see and gives you the chance to fix anything before you apply.

What’s the difference between late payments and arrears?

A late payment is a single missed payment that was eventually paid. For example, you forgot to pay your credit card one month but paid the following month.

Arrears are more serious. They refer to a debt that has built up over multiple missed payments. If you miss several mortgage payments in a row, you’re said to be in arrears. This is treated more seriously by lenders than a one-off late payment.

Beyond arrears, a debt can be recorded as a default. This happens when a lender decides you’re unlikely to repay and formally closes the account. Defaults stay on your credit file for six years and have a significant impact on your ability to get credit.

County Court Judgements (CCJs) are even more serious. These are issued by a court when a debt has not been repaid. A CCJ on your file is a major flag for most lenders.

If you have missed mortgage payments specifically, read our guide on what happens if you miss a mortgage payment.

Will a bigger deposit help me get approved if I have late payments?

Yes, it can. A larger deposit reduces the lender’s risk. If you default on the mortgage and the property has to be repossessed, a lower loan-to-value (LTV) means the lender is more likely to recover what it’s owed.

For applicants with missed payments, some specialist lenders require a minimum deposit of 15% or 20% where a standard applicant might be accepted at 5% or 10%. The more recent or serious the missed payments, the more deposit you may need.

A larger deposit also gives you access to a broader range of products. Some lenders will consider applicants with a patchy credit history at 75% LTV that they would not consider at 85% or 90%.

If you’re unsure whether you have enough deposit for your situation, a specialist broker can tell you which lenders and products are within reach and what deposit level you’d need to access them.

Final thoughts

Missed payments make a mortgage application harder. But they don’t make it impossible. The older they are, the less weight they carry. The more stable your current finances, the better your chances.

Before you apply, check your credit report, fix any errors, and speak to a specialist broker. A broker who works with adverse credit cases can match you to the right lender and save you from making applications that are unlikely to succeed.

If you’ve missed payments and want to understand your options, read our FAQ on can I get a mortgage if I’ve missed payments. Pepper Money works with specialist brokers who understand complex credit histories. You can find a broker through us today.