Does your credit score affect your mortgage rate?

In the UK, lenders do not usually publish mortgage rates by credit score. Instead, credit history decides which lenders and products an applicant can access. A clean file usually qualifies for mainstream products, while recent missed payments or defaults can move an applicant to specialist products, which tend to carry higher rates and fees.

Within a mainstream lender, applicants who pass the credit checks are usually offered the same product rates as each other. The difference shows up when a file falls outside a lender's criteria and a different product, or a different lender, is needed.

Loan-to-value is usually the main driver of the rate. A larger deposit or more equity places the loan in a lower band, where rates tend to be lower. The length of the fixed or tracker period, product fees, the type of property and the purpose, such as buy-to-let, also affect the rate offered.

Market conditions matter too. Rates move with lenders' funding costs and the Bank Rate, so the same applicant can be offered different rates at different times.

Applicants with recent defaults, county court judgments or missed payments are usually assessed against specialist criteria. Specialist lenders price for the higher risk, so rates and fees are typically higher than mainstream products. The age of the issue, whether it has been settled and its size all affect which tier of product applies.

As problems age and the file shows on-time payments since, more lenders may become available. The guide to defaults and late payments explains how lenders treat these entries.

Applicants sometimes focus on raising a score by a few points when a bigger deposit would change the rate more. Moving from one loan-to-value band to the next can open a lower rate tier, while a small change in an agency score may have no effect if the file already meets a lender's criteria.

Both matter, but they work differently. Credit history decides eligibility and the product range; loan-to-value usually decides where in that range the rate sits.

Rate calculators that ask for a credit score give a rough guide at most, because UK lenders do not price on agency scores. A more reliable estimate uses the likely loan-to-value and whether the file is clean or has recent adverse entries, then compares current products for that profile.

A mortgage credit score calculator is being built to show how credit profile and deposit combine.