Compare Mortgage Rates from Magellan Homeloans Against the Market starting at 3.47%

About Magellan Homeloans' Legacy

Before closing its doors to new business, Magellan Homeloans was a well-known specialist lender designed for borrowers with adverse credit.

They were famous for their "Credit Repair" range, targeting people who had suffered a one-off financial event (like a divorce or illness) that caused credit problems (CCJs, defaults, or bankruptcy). Unlike high-street banks, they used manual underwriting to look at the "story" behind the credit score, allowing people to get back on the housing ladder.

However, in 2019, the lender announced that the specialist mortgage market had become unsustainable due to intense competition and rising funding costs, leading them to withdraw from the market entirely.

What Happened to Magellan Mortgages?

If you are an existing customer, your mortgage remains active, but the way it is managed has changed.

• Closed Book: Because Magellan no longer sells mortgages, they do not have a range of new fixed-rate products for you to switch to.

• Interest Rates: Most existing customers are likely on a LIBOR-linked or Standard Variable Rate (SVR). These rates can be significantly higher than the fixed rates available on the current high street.

• Administration: The day-to-day management of the loans (collecting payments, handling queries) is typically handled by Mars Capital. You may see Mars Capital branding on your statements.

Pros and Cons (For Existing Customers)

If you are still with Magellan, the situation is similar to other "mortgage prisoners."

Pros:

• You Have a Mortgage: For many customers, Magellan was the only lender who would accept them at the time. As long as you keep up repayments, your home is secure.

• Credit Repair: If you have kept up with your Magellan payments for the last few years, your credit score has likely improved significantly. This puts you in a strong position to leave.

Cons:

• High Interest Rates: You are likely paying a much higher interest rate than the market average. Because Magellan cannot offer you a new "retention product" (a cheap fixed rate), you are stuck on their variable pricing.

• No Product Switching: You cannot simply call them up and swap to a 2-year fixed rate like you can with Nationwide or Halifax.

• Limited Borrowing: You typically cannot borrow more money (further advance) for home improvements.

How to Apply (or Leave)

New Customers: You cannot apply. If you have bad credit, you should look at active specialist lenders like Pepper Money, Kensington, Precise Mortgages, or Bluestone.

Existing Customers (How to Exit): Your goal should almost certainly be to remortgage away from Magellan to a cheaper active lender.

1. Check Your Credit: Since you took out the mortgage, your credit profile may have "repaired." If your original CCJs or defaults are now over 6 years old (or satisfied), you might qualify for a high-street lender.

2. Check Early Repayment Charges (ERCs): Most Magellan products had ERCs for 2 or 3 years. Since they closed in 2019, it is highly likely your ERCs have expired, meaning you can leave penalty-free.

3. Use a Broker: Do not go it alone. A mortgage broker can check if you now meet the criteria for a standard lender, potentially saving you hundreds of pounds a month.

If you currently have a mortgage with Magellan and want to explore the alternatives, get started here to book a free, no-obligation chat with a broker who can help.