Missed payments on cards, loans or bills do not usually stop you releasing equity from your home, but lenders tend to look most closely at how recent they are, especially in the last 12 to 24 months. Raising extra borrowing at the same time increases your loan to value, and some lenders combine that with a recent missed payment history to set a lower maximum LTV than they would for a like-for-like remortgage.
This page looks at raising money for purposes such as improvements or helping family when missed payments are on file. If a single missed mortgage payment is the issue, one missed mortgage payment covers that specific situation.
On this page
This page covers
- Credit issue
- Missed paymentsUsually stays on your credit file for 6 years from the date recorded.
- Reason for remortgaging
- Raising moneyBorrowing more increases your loan to value, which can change the options available.
Read the main guide: Remortgaging to release equity when you have bad credit
In short
- How recent a missed payment is usually matters more than the account it relates to.
- Raising money at the same time increases your loan to value, which some lenders weigh alongside recent missed payments.
- A missed mortgage payment is generally viewed more seriously than a missed payment on cards or bills.
- A settled run of on-time payments since the missed one can help, even though it does not remove the marker.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Why does recency matter more than the account itself?
Lenders tend to look most closely at the most recent 12 to 24 months of your credit file, because it gives the clearest picture of how you are managing your finances now. A missed payment from several years ago, with a clean record since, is usually viewed very differently from one in the last few months, even if the balance and account type are similar.
For a raise-capital application, that recency effect combines with the higher loan to value the extra borrowing creates. Some lenders respond to that combination by setting a lower maximum LTV than they would for someone simply switching deals without borrowing more.
Does it matter which account the missed payment was on?
Broadly, yes. A missed payment on your mortgage is usually viewed more seriously than one on a credit card, loan or utility bill, because it relates directly to the type of commitment you are asking the lender to extend. Our page on one missed mortgage payment covers that situation on its own.
| Missed payment | How it may be viewed for a raise-capital application |
|---|---|
| Single missed payment, over a year ago | Often viewed more favourably than a recent or repeated one |
| Recent missed payment, cards or bills | Usually looked at closely, especially within the last 12 months |
| Recent missed mortgage payment | Generally the most cautious category |
| Repeated missed payments | Usually assessed more cautiously than an isolated one |
Illustrative only. This is not the criteria of any specific lender.
Does the amount you want to raise change how missed payments are viewed?
It can. A smaller raise-capital request, which keeps your loan to value lower, may leave more lenders open to considering the application even with recent missed payments. A larger request, closer to a lender’s maximum LTV, tends to narrow the field further once missed payments are also on file.
It can help to work out the smallest amount that meets your actual need, rather than rounding up, particularly if some missed payments are recent. See releasing equity with bad credit for how the LTV and amount interact.
What helps show your finances have stabilised?
Even with a clean record since, a missed payment marker stays on your file for 6 years from when it was recorded. What changes over time is how much weight it tends to carry, not whether it is still visible.
- A settled run of on-time payments since the missed one, ideally 12 months or more.
- Being on the electoral register at your current address, which helps lenders verify who you are.
- Avoiding new credit applications in the months before you apply, since each hard search is visible to other lenders.
- Checking your credit reports from all three agencies for errors before you apply.
Getting advice before you apply
A specialist adviser can help you understand realistically how much you may be able to raise given the timing of any missed payments, before you commit to an application and a hard credit search. If missed payments reflect a wider affordability problem, MoneyHelper, StepChange and National Debtline offer free advice.
What may affect releasing equity when you have missed payments
| Factor | Why it matters |
|---|---|
| How recent the missed payment was | Lenders tend to look most closely at the last 12 to 24 months. |
| Which account it was on | A missed mortgage payment is usually viewed more seriously than one on cards or bills. |
| How many payments were missed | A single, isolated missed payment is usually viewed differently from a repeated pattern. |
| Amount you want to raise | A larger raise-capital request increases both your borrowing and your loan to value. |
| Maximum LTV for raise-capital with your credit profile | Some lenders set this lower where recent missed payments are on file. |
| Payment history since | A clean run of payments since the missed one can help, even though it does not remove the marker. |
| Other credit issues | Missed payments alongside a default or CCJ are usually viewed more cautiously than missed payments alone. |
| Affordability of the larger mortgage | The new amount still has to pass an affordability check and stress test. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- The dates and accounts for any missed payments on your file
- How much you want to raise and what it is for
- Your current mortgage balance, deal end date and any early repayment charges
- An estimate of your property’s current value
- Your credit reports from Experian, Equifax and TransUnion
- Proof of income and your main monthly outgoings
Frequently asked questions
Can I release equity if I missed a payment recently?
It can still be possible, though recent missed payments, especially within the last 12 months, tend to be viewed most cautiously and may mean a lower maximum LTV for a raise-capital application.
Does an old missed payment still matter if I want to release equity?
It carries less weight than a recent one, but it stays on your credit file for 6 years from when it was recorded regardless of age or a clean record since.
Is a missed mortgage payment worse than a missed card payment for releasing equity?
Generally, yes. Lenders tend to view a missed payment on the type of commitment they are being asked to extend, your mortgage, more seriously than one on a card, loan or bill.
How much does the amount I want to raise affect the outcome?
A smaller request keeps your loan to value lower, which can leave more lenders open to considering the application even with recent missed payments. A larger request tends to narrow the options further.