What to do if you’re struggling to pay your mortgage

At a glance

• Be completely truthful with your mortgage lender if you’re struggling, as they may be able to put temporary measures in place to help.
• There are insurances you can take out that will provide you with some protection should you be unable to make your repayments.
• There are several organisations, such as Citizens Advice or debt charities, that will be able to offer free advice.

There are few financial things that can weigh as heavily on a mind as worry about paying your mortgage. This could perhaps be due to a change in personal circumstances (such as redundancy, ill health, maternity leave or losing benefit entitlements), or because your mortgage rate is due to rise and your payments will increase accordingly (for example if you’re on a tracker rate or a fixed deal that’s coming to an end).

Either way, the result will be the same, and the worry can be debilitating. But before you become too anxious, it’s important to take control of the situation. So, here are a few things you can do if you’re struggling to repay your mortgage.

Don’t wait until you miss a payment

It’s important to be proactive and put things in motion before you miss a payment. Start by making sure you can answer the following questions to get a better idea of your options:

• Do you know the mortgage rate you're currently paying?
• Are you on a fixed rate or variable mortgage?
• If you are on an introductory deal like a fixed rate or tracker, when does it end? Is there an early repayment charge payable if you want to switch lenders?
• Do you know the standard variable rate (SVR) your mortgage will revert to when you come to the end of an introductory deal?

Now that you know where you stand, you can start taking action.

A good first step would be to review your budget and see if you can cut down on your spending – our guide on budgeting could help – and see if you can reduce any other debts, such as by consolidating or transferring credit cards to interest-free deals.

If your mortgage rate is due to rise soon, make sure to factor this into your calculations to check it will still be affordable, and if not, what your shortfall might be. Our mortgage repayment calculator can give an idea of what your future repayments could look like.

Continue paying as much as you can each month, but if you’re really starting to feel the pinch, make sure to speak to your lender. Getting help as soon as possible is key, because if your account is still in good standing, they can often be more flexible in their support.

For example, you may be able to remortgage to a cheaper deal or extend the term in order to reduce monthly repayments, options that may be trickier if you’ve already missed a payment and your credit score is starting to be impacted. Yet you’ll still likely need to undergo an affordability assessment, so make sure you can afford it and that your credit score is up to scratch.

What if you’ve already missed a payment?

First things first – don’t panic. Speak to your lender as soon as possible and, if you can afford to, make the payment before it’s registered as being missed (most lenders will have a grace period of a couple of weeks to make any payments).

If you miss two or more payments you’ll be classed as being in arrears, which is when your credit score starts to be impacted.

Lenders will typically contact you within two weeks of you missing a payment, but try to get in touch with them first. The sooner you contact them, the sooner steps can be put in place to help, and if you’re still unable to pay you may be able to come to an agreement.

Your lender shouldn’t force you to leave home or repossess your property within 12 months of your first missed payment, so you should have time to come up with a solution.

What help can your lender offer?

Lenders have to treat customers fairly, and whether you think you may miss a payment or have already done so, they’re required to consider all requests to make payments more affordable. Under the Mortgage Charter they can offer forbearance for those who are struggling – in other words, short-term support to help you get back on track – and it won’t affect your credit score.

If you’ve yet to miss a payment, your lender may be able to offer one of the following options:

• Switching to interest-only repayments (or part interest-only/part repayment) for six months.
• Temporarily lengthening the term of your mortgage.
• Offering payment holidays or similar payment arrangements.

If approved, these options could be a great way to reduce your monthly repayments or even pause them altogether for up to six months, which could be enough time to get your finances in order or seek a different long-term solution. Just bear in mind that, although your credit file won’t be impacted during those initial six months, if any of these measures need to continue then it could be.

A more permanent solution could be seeing if you can switch to a new mortgage deal, ideally with your current lender to potentially save on additional costs. However, you’ll need to go through the usual affordability assessments to ensure you qualify, and if you’re in the middle of a fixed rate term, there could be early repayment charges to bear in mind as well.

If you’re already in arrears your options could be more limited and will almost certainly result in a downgrade to your credit score, but your lender will still be expected to treat you fairly.

You may want to discuss alternative payment arrangements with them, such as paying off your arrears slowly over a few months, or even adding the debt to the value of your mortgage to pay it back over the term of the loan. You can still ask if you can reduce your monthly repayments via one of the methods outlined above (such as extending the term), but being accepted for things like payment holidays will be less likely.

Are you eligible for extra support?

It’s always worth seeing if you’re eligible for any extra support, particularly if your personal circumstances have changed, as you could be entitled to benefits but not realise it. You can use a benefits calculator to give you an idea if you’re entitled to benefits and, if so, which ones.

If you’re already in receipt of certain benefits, see if you qualify for the Support for Mortgage Interest (SMI) scheme. This offers a type of loan paid directly to the lender that will help cover your interest payments, so you should have a smaller monthly repayment as a result.

However, you’ll need to pay back the loan with interest at some point, usually when you sell your home (though you can make voluntary repayments before then should you wish). You can find out more on the Gov.uk website.

Note that Wales and Scotland have additional schemes that may be able to help if you’re struggling to afford your mortgage:

• Help to Stay – Wales offers a shared equity loan that can reduce your mortgage repayments.
• In Scotland, the Home Owners’ Support Fund can offer a shared equity or rental scheme if you’re at risk of having your home repossessed.

Mortgage protection insurance

If you have mortgage payment protection insurance in place, now could be the time to claim. This type of policy will cover your mortgage repayments for up to a year if you’re unable to pay them yourself due to ill health, redundancy or unemployment.

Other forms of insurance may be able to offer support too – if you’re claiming on your critical illness cover, for example, you could use some of the payout to meet your mortgage obligations, and the same can be said for income protection insurance.

It’s worth checking what insurance policies you have in place and the kind of payment you’ll receive, and if you don’t have suitable protection it may be worth taking out suitable cover, if only for peace of mind that your mortgage would be covered if you lost your job or fell ill.

Just make sure to be completely honest in your application – if you’re anticipating redundancy, for example, you may not be covered, and if you fail to disclose an existing medical condition your claim could be refused. Always check the terms of any policy so you’re aware of any conditions and exclusions.

Learn more about mortgage payment protection insurance and how it could help on our mortgage protection page.

Speak to a debt charity

If you’re struggling to make your repayments it’s vital to seek support, and there are a lot of charities out there that can help. They’ll be able to offer free and impartial advice and could help you come up with a plan to get out of debt, and some may even be able to talk to your lender on your behalf. A few charities that could help include:

• Citizens Advice
• StepChange Debt Charity
• National Debtline
• Debt Advice Foundation