Recent small default - big problem?

[Defaultwreckingplans]

DP and I have been gearing up to buy our first home in 2027.

Everything was going well until we checked DP's checkmyfile credit report and discovered a very recent default for £50, which was settled in full as soon as we found out it was outstanding. The company had said no default was registered but obviously that wasn't true.

We'll have aprox 200k deposit and want to borrow 200-230k so around 50% LTV.

Chances of this singular default on our otherwise clean and healthy credit reports sending interest rates in to the stratosphere with specialist lenders? Default will be between 6 months to a year old by the time we are looking.

Anyone been through similar?

Ask a mortgage broker?

It might be fine, especially if you can explain it as an admin error rather than being unable to pay.

It could be that your case needs manual underwriting but that might just be a minor delay given a very good deposit and if affordability is good. If you use a broker they should know which lenders are likely to be more accommodating about the situation.

Also obviously do what you need to make sure there's no further mistakes, update contact details, keep on top of admin etc.

I know that times have moved on etc but about 20 years ago, I remortgaged while in a lot of defaulted debt and it added about 0.5% to the rate so hardly worth worrying about. There are specialist lenders who don't charge the earth, especially if you have a good deposit and affordability because if you don't pay, they have your house as security.

A single settled £50 default on an otherwise clean file is usually handled at standard or near-standard rates with a whole-of-market broker, and your deposit putting you around 50% LTV is the bit lenders care about most, so don't panic over it. While you gear up for 2027, write every debt down with its interest rate, pay the minimum on each, put any spare cash onto the highest-rate one, and set a Christmas spending cap before you start shopping so the deposit stays on track.