Getting a mortgage after a trust deed
A trust deed does not legally stop you applying for a mortgage, but it usually makes it harder. Here is what lenders can see, when that changes, and what to check.
Getting a mortgage after a trust deed is possible, but it is usually harder, and no lender has to say yes. A trust deed stays on your credit file for six years from the date it begins, and your entry on the public Register of Insolvencies is removed 12 months after the trust deed ends. Once both have cleared, a lender checking your credit file will no longer see the trust deed there.
Does a trust deed stop you getting a mortgage?
No law stops you applying for a mortgage during or after a trust deed. Citizens Advice Scotland says you are not legally prevented from borrowing, although it may be difficult in practice.
Before you sign, your trustee (the licensed insolvency practitioner who runs the trust deed) must warn you that granting a trust deed may lead to you being refused credit, both during the trust deed and after you are discharged (released from the debts). The information document from the Accountant in Bankruptcy (AiB), the public body that supervises trust deeds in Scotland, says a protected trust deed will lower your credit score and can make it harder to get loans or mortgages.
Each lender decides for itself whom it will lend to. There are lenders that specialise in mortgages for people with a poor credit history, but they commonly ask for a bigger deposit and charge higher interest rates, and the deal on offer may not be affordable. We cannot say which lenders will consider you or on what terms.
When does a trust deed stop showing?
Two separate records matter:
| Record | What it is | How long it lasts |
|---|---|---|
| Your credit file | Held by credit reference agencies and checked by lenders | Six years from the date the trust deed begins |
| Register of Insolvencies | A public register kept by AiB, free for anyone to search | For the whole trust deed, then removed 12 months after it ends |
For a trust deed that runs for the standard 48 months, the credit file entry would drop off around two years after the payments end. If your trust deed lasts longer, for example because you are making extra payments for the equity in your home, check your credit report to see how the entry is shown.
The individual debts in your trust deed may also show missed payments or defaults. The Information Commissioner’s Office (ICO), which regulates how personal data is used, has said it is unlikely to be fair for a debt to stay on your file for longer than six years from the date of the original default.
Can you get a mortgage during a trust deed?
You can apply, but there are extra things to think about.
- New debts are not covered. mygov.scot says credit you take out after signing cannot be included in the trust deed, and new borrowing may affect your ability to keep up your trust deed payments.
- New assets can be claimed. Anything you acquire during the first four years of a trust deed can be claimed by the trustee for your creditors. Buying a property during that time is not something to do without your trustee’s agreement.
- Remortgaging to deal with equity. If you already own your home, your trustee may ask you to try to remortgage to pay a lump sum for your share of the equity. AiB’s guidance gives decision letters from two separate mortgage applications as an example of the evidence a trustee might ask for. See your home and a trust deed.
Talk to your trustee before you apply for any mortgage or remortgage.
Still weighing up a trust deed? Tell us a little about your situation and a licensed insolvency practitioner firm will call you to go through every option, including ones that are not a trust deed.
May not be suitable in all circumstances. Fees apply. Your credit rating may be affected. Free, impartial advice is available from MoneyHelper and other services.
How can you prepare for a mortgage application?
Check your credit file
There are three main credit reference agencies in the UK: Equifax, Experian and TransUnion. The ICO says you have the right to a copy of your file from each of them free of charge. Look for the “statutory report” on their websites; you do not need to sign up to a paid subscription.
Check that the details are right. If something is wrong, raise it with the agency and with the lender that supplied the information. If they will not correct a clear mistake, you can complain to the ICO. There is more on this in our guide to your credit rating.
Keep your discharge paperwork
When you finish your trust deed and are discharged, AiB says you will get a certificate confirming that the debts included in the trust deed are written off. Keep it somewhere safe. The ICO’s guidance for people discharged from bankruptcy is to send proof of discharge to each lender and ask them to update their entry on your credit file. Ask your trustee whether you should do the same. Read more about getting discharged.
Watch out for financial links
If you have a joint account or joint credit with someone, the credit reference agencies may link your files. A lender can then look at both. The ICO says you should not be linked to someone just because you live at the same address, and you can ask the agencies to remove a link once a joint account has closed.
Get regulated advice
A mortgage adviser or broker should be authorised by the Financial Conduct Authority (FCA). You can check a firm on the FCA Financial Services Register. Be wary of anyone who promises that you will be approved.
Budget realistically
A larger deposit usually helps, and higher interest rates mean higher monthly payments. Work out what you could afford if rates rose, and include fees for setting up the mortgage.
How do other Scottish debt solutions compare?
Every formal debt solution in Scotland leaves a record. A Debt Payment Programme under the Debt Arrangement Scheme (DAS) stays on your credit file for at least six years. Sequestration (bankruptcy in Scotland) and the Minimal Asset Process (MAP) are both recorded on the Register of Insolvencies. A trust deed also has fees, and if it fails creditors can pursue you again and your trustee can petition for your sequestration.
If future borrowing matters to you, ask an adviser how each option would affect it. You can compare Scottish debt solutions and get free, impartial debt advice.
Official sources
Common questions
How long after a trust deed can I get a mortgage?
There is no fixed waiting time in law, and no guarantee of approval at any point. Your trust deed stays on your credit file for six years from the date it began, and on the Register of Insolvencies until 12 months after it ends. You could wait until these have cleared, or apply earlier to a lender that considers people with a poor credit history. Either way, each lender sets its own rules and makes its own decision.
Can I remortgage during a trust deed?
Sometimes, and your trustee may ask you to try. If you own your home, one way of paying for your share of the equity is a lump sum, which may come from remortgaging. You must involve your trustee before applying, and a lender may still turn you down. If remortgaging is not possible, the trustee may look at extra monthly payments or other options.
Will a mortgage lender know I had a trust deed?
While it is on your credit file, yes, any lender that checks your file can see it. It stays there for six years from the date the trust deed began. Your name is also on the public Register of Insolvencies, which anyone can search, until 12 months after the trust deed ends. Answer any application questions about past debts honestly.
Can my partner get a mortgage while I am in a trust deed?
Your partner can apply in their own name. If you have a joint account or joint credit, credit reference agencies may show you as financially linked, and a lender can then look at your file too. Simply living at the same address should not create a link. If a joint application is planned, talk to your trustee first, as new borrowing in your name affects the trust deed.
Related guides
- How a trust deed affects your credit rating How long a trust deed shows on your credit file, what lenders see and how to check your file.
- Your home and a trust deed Home equity, valuations, ways to keep your home, mortgage payments and renting in a trust deed.
- Getting discharged from a trust deed How debtor and trustee discharge work, what is written off, refusals and early discharge.
- The Register of Insolvencies What the public trust deed register shows, who can search it and when your entry is removed.