Home Loans For Discharged Bankrupts

How we calculate Home Loan Finder Scores

Read full methodology

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.

But there are specialist bad credit lenders who can help.

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 seven years, this can put your dreams of owning a home on hold.

That's why finding a specialist lender is a really good idea.

Specialist lenders for borrowers with credit problems

Some Australian lenders specialising in lending to people with troubled credit histories include:

• 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. This increases your chance of success and reduces the chance of your application being rejected, which can have a negative impact on your credit report.

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.:

• How to improve your credit score
• Detailed guide to bankruptcy
• Insolvency versus bankruptcy

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.

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.

Read the full Finder Score breakdown

Frequently asked questions

• Can I refinance a bad credit home loan to a regular mortgage later?

  Yes. In some cases borrowers can later switch from a bad credit home loan to a regular home loan if they demonstrate a good repayment history. This can save you money with a lower rate and fees.

• How long after my discharge before I can apply for a loan?

  Most lenders allow discharged bankrupts to borrow just as soon as their term finishes. In some cases, others have a minimum number of years before they can apply for a loan, and a minimum deposit may be required. As mentioned, the longer time you have been discharged, the better.

• I want to set aside money for a down payment before I apply for a loan. How much would I need?

  It depends what sort of loan you are applying for. For home loans, it would be ideal to have at least 20% of the home's purchase price as your deposit amount. This puts you in a safe range, and increases your chance of getting the loan approved.

Written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 609 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips