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Home loans for discharged bankrupts
A bankruptcy can stay on your credit file for 2 years after you're discharged, but you can still get a home loan.
What different scores mean
9+
Excellent
These home loans offer low costs, coupled with a host of features, giving the best overall value.
7+
Great
These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.
5+
Standard
Usually the home loans would offer above average rates. They may still include some competitive features.
0+
Basic
Higher costs and/or fewer features.
Key takeaways
- Most lenders won't consider a mortgage application from someone who has experienced bankruptcy, even if you've been discharged from the bankruptcy.
- But there are specialist bad credit lenders who can help, like Pepper Money, Savvy and Liberty.
- You will still need to be discharged from bankruptcy. And you'll have to get a loan with a higher interest rate.
Lenders who accept discharged bankrupts
Most lenders won't consider a mortgage application from someone who has experienced bankruptcy, even if you've been discharged from the bankruptcy.
But there are specialist bad credit lenders and brokers who can help, such as:
- Pepper Money
- Savvy
- Red Rock Mortgages
- Liberty
Mortgage brokers can help too
Qualified mortgage brokers can help you find appropriate bad credit mortgages. They specialise in helping borrowers in unique circumstances and also help you craft the best possible mortgage application.
Can I get a mortgage after my bankruptcy ends?
You can get an apply for a mortgage from the first day your bankruptcy ends. But keep in mind that your bankruptcy remains on your credit report:
- For 5 years from the start of your bankruptcy.
- Or 2 years after your bankruptcy ends (whichever is later).
Unfortunately, your credit file doesn't list the reasons behind your bankruptcy, meaning you could find it very difficult to get any sort of home loan even once you're discharged.
Because these listings stay on your credit file for five years, this can put your dreams of owning a home on hold.
That's why finding a specialist lender is a really good idea.
How do I apply for a home loan as a discharged bankrupt?
It always helps to have a strong mortgage application. Here are some tips to strengthen your application even as a discharged bankrupt:
- Get your mortgage paperwork together.
- Have a good, continuous employment history.
- Provide details of your bankruptcy.
- Save a big deposit.
How can I improve my credit report?
Here are some useful guides to improving your credit report.:
Check your credit score for free right now
Are mortgages for discharged bankrupts different to regular home loans?
A home loan from a specialist bad credit lender serves the same basic purpose as any other mortgage: it lets you borrow money to buy a property.
But there are some differences too:
- Higher interest rates. Your loan will likely have a significantly higher interest rate. But it still pays to compare and get the best possible deal.
- A higher loan-to-value-ratio (LVR). Regular mortgages usually require a 20% deposit (meaning an LVR of 80%) or even just a 5% deposit. A bad credit loan may only lend you between 55% and 70% of a property's value, meaning you will need a larger deposit. But this isn't always the case.
- More fees. Most mortgages come with fees, but bad credit loans for discharged bankrupts typically charge higher fees. This includes application fees and ongoing monthly fees.
Frequently asked questions
What is Finder Score?
The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.
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We have been discharged for more than 7 yrs… we asked accountant and an mortgage agent for help which means they applied for short term loan for deposit as we rent and have kids at private school- acquiring savings beyond us, but a mortgage wld be less our rent! Resulting in us having multiple applications that have been declined. My husband is on more than 100k and I’m in high 70s… how can we clear the non Approved applications off our rating to improve chance of getting personal loan and eventually home loan
Hi Sue,
Thank you for your question and for contacting finder.com.au – we are a financial comparison website and general information service designed to help consumers make better decisions. Please note that we are not affiliated with any company we feature on our site.
Basically, when you apply for any form of credit, the lenders you’re applying with will most likely make an enquiry on your file. So when you have several enquiries on your file due to many credit applications in just a short period of time, this negatively impacts your rating and thus makes you less likely to get approved for a credit. Unfortunately, legitimate enquiries cannot be removed from your file, unless the lender made an enquiry without proper authorisation from you. I highly recommend you read our guide that lists tips on how to improve your credit score.
Nevertheless, if you are looking for a lender who might approve you for a personal loan, you may check these bankrupt loans for your options.
Please note though that your approval may still be on a case by case basis so it’s important that you read the criteria, relevant PDS/T&Cs of the loan and discuss your eligibility directly with the lender.
Cheers,
May
Hi. I am applying for a surname change and one of the questions is about bankruptcy. How can I find out the discharge date of my bankruptcy and how can I get a copy of the letter of discharge?
Thanks
Grace
Hi Grace,
Thank you for contacting Finder.
According to the Australian Financial Security Authority website, your bankruptcy discharge should be recorded on the National Personal Insolvency Index. The Australian Financial Security Authority will have some information on how to get a copy of your letter of the discharge as well.
Regards
Jodie
Hi. I’m applying to have my surname changed and one of the questions is about bankruptcy. How can I find out the date my bankruptcy ended?
Thanks
Hi Grace,
Thank you for contacting Finder.
According to the Australian Financial Security Authority website, your bankruptcy discharge should be recorded on the National Personal Insolvency Index that you can search to find the details of.
Regards
Jodie
Hi Jodie. I went on that site but it costs to find out….
Hi Grace,
Unfortunately I don’t know of any other service that allows you to get the documentation without a fee, you would need to speak to an accountant or financial advisor.
Regards
Jodie
Im a discharged bankrupt for more than 7 years. I have not tried to get any credit in this time. Will my history still effect my chances of getting a loan.
Hi Nic,
Thanks for your enquiry.
Although bankruptcy can remain on your credit file for up to 7 years, there are numerous specialist brokers and lenders that are willing to offer home loans to discharged bankrupts.
Keep in mind that lenders generally charge a higher interest rate with these loans compared to standard home loans as a precautionary measure.
Above on this page, you can compare these lenders on this page and click on the ‘enquire’ button to be redirected to their website for further details.
Thanks,
Belinda
I am going bankrupt and my plan is that once i am discharged to look at purchasing a house where do i stand and what do i do?
Hi Amy,
Thanks for your enquiry.
You will find a list of lenders listed above that offer home loans for discharged bankrupts. Your best course of action would be to contact one of these lenders to discuss your options. Select ‘Go to Site’ to head over to their website to apply.
You might also be interested to learn more about how you can get approved for a home loan with bad credit. Please ensure to read through the relevant product disclosure statement and terms and conditions to ensure that you got everything covered before you apply for a loan.
I also recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application.
Kind regards,
Belinda