Remortgage with a CCJ to consolidate debt

How lenders typically treat it

A general guide to how the market behaves, not a promise about any lender. Criteria change and every case is assessed individually. See the lender criteria database for named lenders.

Does a CCJ stop you remortgaging to pay off debt?

Not by itself, but it removes most of the market. A county court judgment is a court order confirming that you owe a debt and have not paid it. To a mortgage lender it is one of the clearest signals on a credit file, because it means a creditor went to court and won, so lenders write specific rules about it rather than folding it into a general score.

Those rules run on three questions. Is the judgment satisfied? How long ago was it registered? And how big was it? A satisfied judgment for a few hundred pounds registered three years ago, with a clean file since, is a very different case from an unpaid judgment for £4,000 registered last spring. Mainstream lenders tend to decline anything inside 36 months and often anything unsatisfied at any age. Adverse credit lenders draw the line at 24 or 12 months and grade the case from there.

The consolidation purpose then adds its own layer. Remortgaging to pay off debt means borrowing more than you owe now and using the difference to clear cards and loans, and lenders treat that as higher risk than a like for like remortgage. Many cap it at a lower loan to value, and some will not lend for consolidation to anyone with adverse credit at all. So a CCJ has to clear two hurdles: the lender's judgment policy and its consolidation policy. Our guide to remortgaging to pay off debt explains the consolidation side; this page is about how the CCJ interacts with it.

Does it matter whether the CCJ is satisfied?

It matters more than almost anything else. A CCJ is recorded on the Register of Judgments, Orders and Fines and on your credit file. If you pay it in full within one calendar month of the judgment date, you can apply to have it removed from the register entirely, and it will not show at all. If you pay after that, you can apply for a certificate of satisfaction from the court and the entry is marked satisfied, though it stays on your file for the full six years. GOV.UK sets out both processes and the small court fee involved.

Lenders read those three states differently. A removed judgment does not exist as far as the credit file is concerned. A satisfied judgment shows a debt that went wrong but was put right, and most adverse credit lenders, plus some mainstream ones after enough time, will consider it. An unsatisfied judgment shows a court-ordered debt still unpaid, and most remortgage lenders decline it regardless of age, on the simple basis that a creditor who has already won in court could take further action against you or the property.

There is one practical exception. Some lenders will consider a consolidation remortgage where an unsatisfied CCJ is paid from the loan itself on completion, treating it as one of the debts being consolidated. That usually comes with a lower loan to value cap and a higher rate tier, and it depends on the judgment being modest. If you can satisfy the CCJ before applying, doing so and obtaining the certificate opens more doors than any other single step.

How old does the CCJ need to be?

There is no single answer, because each lender sets its own threshold, but three ages come up again and again in published criteria: 12 months, 24 months and 36 months. They act as gates. Cross one and a new group of lenders becomes available, usually with a better rate tier and a higher loan to value.

• Under 12 months. Very few remortgage lenders will consider a consolidation case. The judgment is too recent to show a pattern of recovery.
• 12 to 24 months. A small group of adverse credit lenders consider a satisfied CCJ, typically with a cap around 70% to 75% loan to value and a higher rate.
• 24 to 36 months. Most adverse credit lenders, often up to 75% to 80% loan to value, with the rate tier improving.
• Over 36 months. Some mainstream lenders re-enter the picture, and adverse credit lenders may treat the case close to clean credit, subject to conduct since.

Age is counted from the judgment date, not from when you paid it. Age also interacts with size and number: one judgment for £300 that is 18 months old may be treated better than three judgments totalling £6,000 that are 30 months old. Conduct since the judgment carries real weight too. A file that shows every payment made on time since the CCJ tells a lender the problem was a moment, not a habit.

Timing is worth planning. If your CCJ crosses the 24 or 36 month line in a few months and your current deal ends around then, so no early repayment charge applies, waiting can improve both lender choice and rate. An FCA authorised broker can tell you which gate you are approaching.

How does a CCJ interact with consolidation loan to value caps?

Two reductions stack. The first is for purpose: many lenders that allow remortgaging to 85% or 90% for a straightforward remortgage cap debt consolidation at 80% or 75%, because paying off unsecured debt with secured borrowing is treated as higher risk. The second is for the CCJ: adverse credit tiers carry their own caps, and the lower tiers, for younger or larger judgments, sit at 70% or below. The lender applies whichever is lower.

Take a home worth £280,000 with £190,000 outstanding on the mortgage, which is 68% loan to value today. At an 80% cap the new mortgage could be £224,000, releasing £34,000 for consolidation. At 75% it could be £210,000, releasing £20,000. At 70%, it could be £196,000, releasing £6,000, which is unlikely to be worth the fees. The same homeowner therefore has a workable remortgage at one lender's tier and none at another's. Our guide to how much equity you need gives more examples.

Where the cap leaves you short, a secured loan alongside your existing mortgage may reach a higher combined loan to value, because the second charge market often lends a little further against the same credit profile. It also sidesteps any early repayment charge on your current deal. Our secured loans with a CCJ page sets out what those lenders consider and at what ages. Whichever route you take, the borrowing is secured on your home, and your home may be repossessed if you do not keep up the repayments.

What would a debt consolidation remortgage cost with a CCJ?

More than a clean-credit remortgage, because the rate tier reflects the judgment, and the tier applies to your whole new mortgage rather than only the debt being added. Any early repayment charge for leaving your current deal comes on top. The example below uses the fixed illustrative remortgage rate applied across this site and looks only at the £25,000 being consolidated. A lender pricing for a recent CCJ may quote a higher rate.

The monthly outgoing on those debts drops from £665 to £171, while the £25,000 costs £40,935 to repay over 20 years because the borrowing runs much longer than the original loan and cards would have. At a CCJ rate tier the monthly figure is higher and so is the total, and the higher rate on your existing £190,000 balance can cost more each month than the consolidation saves. That is why the calculation has to include the whole mortgage, not just the debt, and why a qualified adviser will show you both routes with fees and any exit charge before you decide.

If the numbers only work with nothing going wrong, free, impartial advice from MoneyHelper, StepChange or Citizens Advice comes first.

What improves your chances

• Satisfy the judgment and obtain a certificate of satisfaction from the court; lenders want proof, not your word.
• Check the judgment date on all three credit reports and note when it crosses the 12, 24 and 36 month gates.
• Keep every mortgage, card and loan payment on time since the CCJ; conduct after the judgment is weighed heavily.
• Have a short, honest explanation of what caused the judgment and why it will not recur.
• Line up the remortgage with the end of your current deal so no early repayment charge eats into the benefit.
• Use a broker who knows which lenders work to which CCJ threshold, rather than applying to several and adding searches to your file.

Alternatives worth considering

If the CCJ is too recent or unsatisfied for a remortgage, a secured loan from a specialist second charge lender is the closest alternative; see secured loans with a CCJ for the thresholds those lenders use. If your credit file carries other problems alongside the judgment, our remortgage with bad credit page takes a broader view. And if the judgment is one sign of a wider struggle, a debt management plan or an IVA through a free debt charity may be more appropriate than borrowing against your home; our comparison of consolidation and a DMP sets out the trade-offs.