Debt Management Plan

Posted on 2 December 2018 by cath

I am on a debt management plan and my fixed rate mortgage term is coming to an end what are my options with regard to obtaining a further fixed term.

Hi Cath,

Mortgage Lenders are not going to like your debt management plan and you are not going to find it easy to get a mortgage. It will all depend on what is showing on your credit file and whether or not any defaults have been registered.

I recommend that you get a copy of your credit file from one of the Credit Reference Agencies and then make an appointment to see a local independent mortgage adviser. They will be able to see exactly what in the way of bad credit is registered and then make an assessment on whether or not you have a chance of getting a mortgage.

I think that you would be best placed asking your Lender what deals they have for existing borrowers coming to the end of their fixed rate period. The majority of Lenders now have either special loyalty rates or allow you to choose from any of their current new business range. This will avoid any problems arising from your credit record.

Depending on your exact circumstances, I would expect you have trouble securing a new mortgage at a competitive rate and you even if your existing Lender can not offer you a new fixed rate, you could well be better of remaining with them on the follow-on variable rate applying to your mortgage.

If you are looking to go with a new lender, you would be better off waiting until the earliest defaults drop off your credit file and using the time in between now and then to build up your deposit to as near to 25% as you can and maintaining a clean credit record. If you have a credit card or similar that you can use and clear each month this would go along way to re-establishing your credit rating.

I recommend that once you have spoken to your existing Lender, you talk to an independent mortgage broker and see if they are able find a better mortgage product for you.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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