Can I Get a Mortgage With a Debt Management Plan (DMP)?

illustration of Can I Get a Mortgage With a Debt Management Plan (DMP)?

The mortgage process can be confusing and daunting. It’s even more stressful if you’re worried about getting accepted with a Debt Management Plan (DMP).

Applying for a mortgage can be daunting, especially if you've had or still have a debt management plan (DMP). The good news is it's definitely possible to get a mortgage with a DMP, but you'll have fewer options than if you had a perfect credit score.

There are specialist mortgage lenders who have experience lending to people with credit issues like DMPs. You’ll just need the right mortgage broker to find you one of these lenders.

In this Guide, you'll find information about mortgages with a DMP, and practical steps for getting accepted.

Can I get a mortgage with a DMP?

Yes, you can get a mortgage if you have an active or completed DMP. But you’ll have fewer options available to you than someone with a cleaner credit history.

There are many lenders in the market who specialise in providing mortgages designed for people who’ve had credit problems, so even if you’ve been turned away by high street banks, it’s still possible to get a mortgage from a more specialist lender.

If you’re currently in a DMP, you might also have late payments or defaults on your file, which can affect a lender's decision to grant you a mortgage. Most big banks aren't likely to consider you. But there are specialist lenders who provide mortgages specifically for people with bad credit. They'll review your application on a case-by-case basis, look at your individual circumstance and assess whether you can afford the repayments. 

Lenders will want to know what caused your debts, how well you've kept up with your DMP repayments, and whether you've had any additional financial difficulties.

When applying for a mortgage with a DMP, it’s best to speak to a specialist mortgage broker. Our Mortgage Experts know which lenders are most likely to accept you, and will be able to make your application look as good as possible. Get in touch to find out your options.

What is a DMP?

A DMP is an arrangement between you and the people you owe money to. They're for what's called 'non-priority debts' - things like credit cards or mobile phone contracts. The plan lets you pay off your debts in manageable repayments. Usually, you’ll get a DMP through a DMP provider, for example, a debt charity or a debt management company. And they’ll manage your debt for you. You make one monthly payment to your DMP provider who then pays your creditors for you.

Unlike an Individual Voluntary Arrangement (IVA) the interest on your debt isn't frozen. You'll also be paying back less than you would without a DMP, so it can take a long time to clear your debts. Because aDMP isn’t a legal agreement, you can cancel it at any time. There's also no legal restriction stopping you from taking out more credit.

If you’re worried about debts or thinking about a DMP, you can get free advice from UK debt charity StepChange

How does a DMP affect mortgages?

To get a better mortgage deal, you generally need a good credit score and a decent-sized deposit. This can be harder to achieve if you have a DMP. Every time you make a repayment on your DMP, it can appear as an 'underpayment' on your credit file. Even though you have an agreement with the people you owe money to, your monthly repayments are generally less than the minimum required. This gets recorded as defaulted payments, and so lowers your credit score further. 

What will lenders check?

When looking at your application, lenders will check your income, outgoings, and affordability. They'll also look to see if you've had any other credit issues such as CCJs or bankruptcies and how long ago they happened. Smaller issues like late payments or settled arrears might not be as much of an issue - it all depends on the lender. Generally, the older the issue, the less weight it carries with lenders.

Lenders know that a mortgage won't be the only debt in your life. They expect you to have other commitments. But the amount and the types of debt will affect how much you can borrow - especially if you're managing them through a DMP. Read more in our Debt to Income Ratio Guide. However, having a plan in place shows you've taken active steps to manage your debts. And if you're currently renting, your mortgage repayments may be less than your monthly rent, which all helps when it comes to the affordability checks.

How much can I borrow?

When applying for a mortgage with a DMP, the amount you'll be able to borrow will be affected by your credit history. A term you’ll hear a lot is loan-to-value (LTV). LTV refers to the size of the loan you need in relation to the cost of the property you're buying.

Lenders usually want a deposit of around 10%. But the more you can put down the better, because it means you owe less back to the lender. It can also open up more competitive interest rates. If you have bad credit, you'll probably be asked to put down at least 15% for a deposit (85% LTV). You can read more in our Guide: How Does Bad Credit Affect Loan to Value 

If you're struggling to save for a deposit, there are government schemes available like the Mortgage Guarantee Scheme and Help to Buy (for first time buyers) which only requires a 5% deposit. Though getting a 95% LTV mortgage will be tricky with a DMP and other serious credit issues, so you'll need a specialist mortgage broker to talk you through your options. Make an enquiry to speak to a Mortgage Expert.

Can I remortgage with a DMP?

Yes, you can remortgage with a DMP. But there are a few things to consider. You might be looking to remortgage to consolidate your debts and reduce/clear your DMP - which is an option. However, you should ensure you are in a good position when it comes to remortgaging. Ideally, you should own a good percentage of your home, and should choose a time when the property is worth more than when you bought it.

Remortgaging largely follows the same process as if you were applying for the first time. You'll still have to pass affordability checks, and a lender will take into account how much debt is covered by your DMP. Bear in mind that going to your existing lender doesn't guarantee your remortgage application will be accepted. It's a good idea to go to a specialist lender if you're looking to remortgage with a DMP.

Getting a mortgage with a settled DMP

Applying for a mortgage after a DMP can be worrying, but there's steps you can take to help your application. Start by checking your credit report - you can do this using checkmyfile*. See if all your personal information is correct and that you're registered to vote at your current address (if you’re not, it'll lower your score).

Then review the details of all your credit accounts. There shouldn't be any defaults on the accounts which were under the DMP. If you spot any, get in touch with the creditors and request a correction. 

There are some small steps you can take to start rebuilding your credit history after a DMP, which will help your mortgage application. Read more in our Guide: How to Improve Your Credit Score Before Applying for a Mortgage 

It’s a good idea to talk to a specialist mortgage broker before submitting any applications. The big banks are more likely to turn you down, and a mortgage rejection can really hurt your credit score - that’s the last thing you want! Our Mortgage Experts will explain your options clearly and hold your hand every step of the way. They’ve seen it all, so won’t be judgemental. Make and enquiry to get started 

*Heads up, when you click through to our affiliate links, we may earn a small commission at no extra cost to you. We only recommend sites we truly trust and believe in.

What can I do if my DMP mortgage application is declined?

If you have a DMP and your mortgage application’s been declined, you should pause and consider your options carefully. You may feel anxious, especially if you've already had an offer accepted on a property, but don't apply to another lender straight away. If you get refused again this will further hurt your credit score. 

Most big banks and high street lenders have strict lending criteria. They just aren't set up for people with complex credit files. It's best to speak to a specialist mortgage broker. They'll know how to make your application look good, and will have the contacts and experience needed to choose the lender most likely to accept you. Submit an enquiry to get started.

We get how it feels when you’re refused a mortgage. We have first-hand experience of how your mental health can be affected. We're working hard to spread awareness and tackle the stigma that comes with bad credit issues. Life happens. There's many reasons why you might fall into bad credit, and while getting a mortgage with a DMP can be trickier compared to someone with perfect credit, that doesn't mean it's impossible. If you’re struggling with debt, you can talk to UK debt charity StepChange for advice.


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

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