A bad credit mortgage in Scotland typically requires a minimum deposit of 5%, which can be sourced from either your own savings or a family gift.
Like any mortgage, having a larger deposit often leads to better interest rates, as mortgage deals are based on risk.
Mortgages are structured in loan-to-value bands, meaning the interest rate you receive reflects the lender’s assessment of the risk involved.
The bigger your deposit, the less risk for the lender, and the more competitive your rate will be.
For example, a 95% loan-to-value mortgage will likely carry a higher rate than a 60% loan-to-value deal, since the lender is taking on more risk.
In the case of bad credit mortgages, the deposit amount can also be influenced by the severity of your credit issues.
The older and smaller the credit problem, and whether it has been resolved, can impact the required deposit.
Recent or unresolved credit issues may mean a larger deposit is needed.
Our mortgage advisors in Scotland can guide you through this process, helping you understand the deposit you will need for your specific bad credit mortgage in Scotland.