The 85% LTV Adverse Credit Lending Landscape
At 85% LTV, lenders are working with a 15% equity cushion. In a stable market, that is sufficient security — but it leaves less room for property price fluctuations than the 25% or 40% equity available at 75% and 60% LTV. When adverse credit is added to the assessment, many lenders conclude that the combined risk — higher LTV and impaired credit history — falls outside their risk appetite.
The specialist adverse credit lenders who do operate at 85% LTV have deliberately chosen to serve this market. They understand that borrowers with 15% equity and adverse credit represent a real and persistent market need, and they have built their pricing models, underwriting criteria, and operational processes around assessing these applications fairly. They are not doing borrowers a favour — they are making a calculated, commercially sound decision to lend where others will not.
Products available at 85% LTV with adverse credit are predominantly fixed-rate deals, typically over two or five years. Tracker products are less commonly available at this end of the market. The fixed rates offered will carry a significant premium over the best market rates, reflecting the combined risk profile — but they may still represent a meaningful saving over a lender's SVR, which is often 7% or above.
It is worth being realistic about what is achievable. If your adverse credit is very recent — defaults or CCJs within the last 12 months — and your LTV is at 85%, the number of willing lenders may be very small indeed. In some cases, it may be worth waiting a period to allow the adverse marks to age and accumulate more positive payment history before attempting the remortgage. A broker will be honest with you about what is realistically achievable now versus in six to twelve months.
What Adverse Credit Can Be Considered at 85% LTV?
Specialist lenders at 85% LTV do not apply a blanket acceptance to all types of adverse credit. Their criteria typically define maximum numbers and values of adverse marks, minimum ages for those marks, and whether they need to be satisfied. Understanding where your credit history sits against these criteria is a key part of the pre-application assessment a broker will do on your behalf.
Missed payments and arrears are the mildest form of adverse credit and are the most likely to be accepted at 85% LTV, particularly where they are historic (two years or more ago) and have since been resolved. Even at this LTV, a pattern of recent missed payments is likely to exclude most specialist lenders, as it suggests ongoing payment difficulty rather than a one-off historical event.
Defaults and CCJs at 85% LTV require lenders who specifically accept these markers. Most will have criteria around the maximum value, the date registered, and whether the default or CCJ must be satisfied. An unsatisfied CCJ from the last year at 85% LTV is likely to find very few willing lenders. A satisfied CCJ from three or more years ago at the same LTV is a materially different proposition.
Debt management plans, IVAs, and bankruptcy represent the most serious adverse credit markers. At 85% LTV, lending against these markers is extremely restricted. If your IVA was discharged or your bankruptcy was discharged more than three years ago, some specialist lenders may still consider you — but at 85% LTV rather than 75%, the bar is higher. This is a scenario where specialist broker guidance is indispensable rather than simply advisable.
