DRO Mortgage FAQ
General information only. This is not financial advice.
Last reviewed: 2026-06-06
What is a Debt Relief Order (DRO) and how does it affect a mortgage?
A Debt Relief Order (DRO) is a formal insolvency procedure in England, Wales, and Northern Ireland that writes off qualifying unsecured debts after a 12-month moratorium period, provided your total debts do not exceed £30,000 (as of 2024, raised from the previous £20,000 threshold), your assets are below £2,000, and your monthly disposable income is below £75. During the DRO period, you cannot borrow more than £500 without disclosing the DRO to the lender. A DRO has a significant impact on your credit file and is treated similarly to bankruptcy by most mortgage lenders: mainstream lenders will decline applications from applicants who have an active or recently completed DRO, and specialist adverse credit lenders are typically required. The good news is that a DRO lasts for only 12 months (compared with a standard bankruptcy of 12 months but with a longer credit file impact), and the debts included are discharged at the end of the period.
How long does a DRO stay on my credit file?
A DRO is recorded on your credit file for six years from the date it was approved — not from the date it was discharged. Since a DRO lasts 12 months, it will typically remain on your credit file for five years after discharge. The DRO is also recorded on the Insolvency Register, which is a public record; entries are removed from the register three months after the DRO is discharged (i.e. roughly 15 months after the DRO start date). Once six years have passed from the DRO start date, it drops off your credit file automatically, and no lender credit check will flag it. However, as with mortgage arrears, some lenders ask on their application forms whether you have ever been subject to a DRO, IVA, or bankruptcy — these questions may extend beyond the six-year credit file window.
Can I get a mortgage while a DRO is active?
During an active DRO (the 12-month moratorium period), you are legally prohibited from borrowing more than £500 without disclosing the DRO to the lender. No mainstream or specialist mortgage lender will grant a mortgage to someone in an active DRO, as the insolvency status makes the transaction impossible — you cannot legally take on secured credit of this magnitude while formally insolvent. If you are in an active DRO and hope to obtain a mortgage in the future, the best use of the DRO period is to focus on rebuilding savings and stabilising your income, so that when you do apply post-discharge you are in the strongest possible position.
When can I apply for a mortgage after a DRO?
You can technically apply for a mortgage the day after your DRO is discharged (12 months after approval), but in practice you are very unlikely to be accepted by any lender at that point. The DRO remains on your credit file for six years from the approval date, and most specialist adverse credit lenders have minimum 'time since discharge' requirements before they will consider an application. As a general guide: within one year of discharge, mortgage options are very limited even with specialist lenders; one to three years post-discharge, specialist adverse credit lenders may consider applications with a significant deposit (25–35%); three or more years post-discharge, a broader range of specialist lenders typically opens up; and beyond six years from the DRO approval date, the DRO drops off your credit file and you re-enter the mainstream market (subject to your current credit profile and income). Using the DRO period and the years immediately after to maintain clean credit and save a deposit is the most effective way to accelerate your path to mortgage eligibility.
What deposit do I need for a mortgage after a DRO?
A larger deposit significantly improves your chances of obtaining a mortgage after a DRO. Most adverse credit lenders who will consider a post-DRO application require a minimum deposit of 15–25% of the property value (75–85% LTV maximum), and some require 30–35% if the DRO was recent. The reasoning is straightforward: a larger deposit reduces the lender's risk in a scenario where the borrower's credit history indicates previous financial difficulty. If you can accumulate a 25% deposit, you open up access to more adverse credit lenders and can achieve more competitive rates. Some lenders may also consider the source of the deposit — savings built up after the DRO carry more evidential weight than a recent windfall, as they demonstrate sustained financial discipline.
How does a DRO compare to IVA or bankruptcy for mortgage purposes?
From a mortgage perspective, DROs, IVAs, and bankruptcy are all treated as serious adverse credit events, but there are some practical differences. A DRO discharges after 12 months (compared with a standard IVA which typically runs for five to six years, and bankruptcy which also typically discharges after 12 months). All three appear on your credit file for six years from the start date — so in terms of credit file impact, the discharge timelines create different gaps between discharge and credit file clearance. For example: a DRO starting in January 2022 discharges in January 2023 (12 months later) and clears the credit file in January 2028 (6 years from start). An IVA starting in January 2022 might discharge in January 2027 and clear the file in January 2028 — very similar end point. Specialist lenders do not always treat these equally, however; some are more comfortable with DROs than bankruptcies because the lower debt thresholds for DRO eligibility suggest a different profile of financial difficulty.
Will a DRO prevent me from getting a buy-to-let mortgage?
Yes — a DRO will prevent you from obtaining a buy-to-let (BTL) mortgage through virtually any mainstream or specialist lender while the DRO is active or recently discharged. BTL lenders apply similar adverse credit criteria to residential mortgage lenders, and in some respects are stricter, as lending for investment properties is subject to additional regulatory and risk considerations. After discharge, the same broad timeline applies as for residential mortgages: specialist adverse credit lenders may consider BTL applications three or more years post-discharge with a substantial deposit (typically 25–35%). If you already own buy-to-let properties at the time of the DRO, you should seek specialist advice, as the treatment of existing assets in a DRO depends on their value and whether they fall within the asset threshold.
Which lenders consider mortgages for applicants with a DRO?
Mainstream lenders — major banks and most building societies — do not accept applications from applicants whose credit file shows a DRO. Specialist adverse credit lenders are the appropriate market for post-DRO mortgage applications. Lenders including Pepper Money, Bluestone Mortgages, Precise Mortgages, and Together Money have appetite for adverse credit cases including post-DRO applications, subject to their specific criteria around time since discharge and deposit size. Criteria change regularly, and what one lender accepts today may differ next year. A whole-of-market specialist mortgage broker who places adverse credit cases is the most reliable route to identifying which lenders are currently willing to consider your specific profile — time since DRO, deposit, income stability, and any other credit events on your file.
Risk warning
Your home may be repossessed if you do not keep up repayments on your mortgage. A DRO has serious long-term implications for borrowing — seek independent debt advice from a regulated service before applying for a DRO or any mortgage.
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