Higher interest rates mean many are struggling with more costly monthly payments. If you’re worried about keeping up with your mortgage – or have already fallen behind – there are steps you can take to get back on track.
Discover the help you can get now, including tailored support from your lender and added help if you’re entitled to benefits.
If you’ve not missed a payment, but you are struggling, there are things you can do now.
If you’re worried about your mortgage payments, the first step should always be to contact your lender. The sooner you act the better, as you’re likely to have more options before you miss a payment.
Lenders must treat you fairly and consider any request you make to change the way you pay your mortgage.
In response to higher interest rates, the Government launched a ‘Mortgage Charter’ that enables lenders to offer ‘forbearance’ in the form of flexible, short-term support. Asking your lender for support will not impact your credit score.
If you're worried about staying up to date with your mortgage repayments but have not missed a payment, these are the three main options you can ask your lender about:
All these steps come under the ‘Mortgage Charter’, which means they won’t negatively affect your credit file during the six-month period. But if these measures continue past that, then they could affect your credit file (your personal credit history that lenders use to decide whether to lend to you).
If you’ve already missed a payment and are in mortgage arrears, use our Debt advice locator tool to find free and confidential debt advice.
Doing a budget before speaking to your lender could help your discussions about what you can afford as repayments. Our Budget planner can help you do this.
If you’re on a repayment mortgage, by lengthening your remaining mortgage term you get longer to pay back the amount you owe on your mortgage. This means your monthly payments will reduce. If you’re on an interest-only deal your payments will remain the same.
Here’s what you need to know:
Under the 'Mortgage Charter', after you’ve agreed an extension, you can switch back to your original term after six months. This means you could use this as a short-term way to pay less. Or, you could see it as a long-term measure if needed.
If you switch to interest-only repayments, you'll pause repaying the money you've actually borrowed, typically for up to six months.
Here’s what you need to know:
Essentially, you need to remember this is a temporary measure and you’ll need to start repaying the amount you’ve borrowed as well as the interest.
A mortgage payment holiday is when your lender allows you to temporarily stop or reduce your monthly mortgage repayments.
Here’s what you need to know:
Taking a mortgage holiday is only suitable as a temporary measure – and only when you have enough equity in your property to prevent you falling into unmanageable levels of debt.
While a payment holiday can be a much-needed financial break and help you get back on track with other bills, you should weigh up the pros and cons.
It relieves some financial pressure for a while.
It could be a good option if you’re only facing a temporary drop in income and your income is set to increase when the ‘holiday’ ends.
It’s not suitable if you can’t afford your mortgage payments because your household income has reduced permanently.
You’re still racking up interest on your remaining mortgage balance.
Your outstanding mortgage balance and mortgage payments will be higher than they were before the holiday.
Even if your lender agrees to this temporary solution, your credit file will be impacted. This could affect your ability to get credit in future.
It is sensible to always check if you have insurance cover
Certain types of insurance cover can help with your mortgage repayments if your income has fallen because of redundancy, accident or sickness.
You might have taken it out when you got your mortgage – look through your mortgage paperwork or check with your lender or mortgage broker.
These are the main types of insurance you might have:
It is essential to look at your finances
If you're struggling with your mortgage payments, taking a good look at your existing finances should be your priority. This means creating a budget and seeing if it’s possible to trim your outgoings.
Spending some time considering your spending habits will help you see if you can save money anywhere.
To help see where you can save cash, have a look at your outgoings in relation to what you have coming in, then divide spending into essential and non-essential items.
To help you manage your finances better, use our Budget planner
Budgeting is essential if you’re struggling to meet outgoings. Here are just a couple of ways to cut back:
For things like food and energy bills, try shopping around to get a better deal elsewhere.
However, think carefully before you cut back on insurance, especially life insurance.
Ask yourself whether spending a small amount on the premium is better than the risk of:
If you’re living on a low income whether you are in employment or not, you might be missing out on hundreds – or thousands – of pounds in help you are entitled to.
Every year it’s estimated that more than one million households are missing out on more than £7bn in Universal Credit alone. If you’re eligible for Universal Credit you could be eligible to apply for additional mortgage support.
If you claim certain means-tested benefits, you might be able to claim help with your mortgage interest payments. This is called Support for Mortgage Interest (SMI) and is offered as a repayable loan.
If you claim these benefits, check if you can get SMI help:
Find out if you can get a cheaper mortgage deal
If you’re not in arrears but are finding it hard to meet your repayments, it could be a good idea to shop around for a cheaper mortgage deal.
When you first took out your mortgage, you might have signed up for a really good deal. But over time, the mortgage market changes, and new deals become available. This means there might be a better deal available for you now, which could save you hundreds of pounds.
Switching to a new deal with your existing lender or remortgaging with a new lender could potentially save you hundreds – even thousands – of pounds every year.
Most people remortgage when they get to the end of their fixed or discount rate term as this is when your mortgage might stop being a good deal. If you have six months or less until your deal expires you should start looking at new cheaper deals.
You can remortgage at any time. But if you’re not at the end of your fixed or discount rate term, you might have to pay an early repayment charge.
Understand how to get help if you have missed a mortgage repayment
If you miss a mortgage repayment, you risk building up overdue payments. This is called being in 'mortgage arrears'. Missing payments can damage your credit file and eventually you could lose your home. But it’s important to know there is support available to help you get back on track.
While mortgage arrears are sometimes defined as missing two or more monthly payments, it’s important to take action if you miss one.
Your mortgage lender will be keen to help and will talk through your options.
They must make reasonable attempts to reach an agreement with you, including considering whether to change the way you make payments and when you make them.
If you fall into arrears, within 15 working days your lender must:
Under the ‘Mortgage Charter’ customers won’t be forced to have their homes repossessed within 12 months of their first payment.
Lenders have to treat you fairly and consider any request you make to change the way you pay your mortgage. When discussing options with your lender:
Depending on your circumstances your lender might also make suggestions for you, for example extending your mortgage term.
Don’t delay – it's important to get in touch with your lender as soon as possible.
Find out how to get free advice
If you’re struggling to meet repayments, there are services that offer free, confidential advice.
As well as speaking to your lender, get support from one of the many free debt advice charities and organisations.
A trained money adviser from an independent agency, like Citizens Advice or Shelter, can give you free and impartial advice.
There are other charities that can help you talk through your situation and provide information on solutions.
If you have missed more than one repayment, it could be a good idea to speak to a trained and experienced debt adviser about your situation. They can help you see what the best decision might be.
A debt adviser can:
Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.
Find out about government help with mortgage payments
The 'Mortgage Charter' is currently the main source of government-backed help. Launched alongside the Financial Conduct Authority, the charter enables lenders to offer flexible support if you’re struggling with repayments. However, if you live in Wales or Scotland, there is additional government help available.
If you live in Wales and are struggling to pay your mortgage you can access help from your lender via the 'Mortgage Charter'. But if your lender can’t help you, you can apply to the ‘Help to Stay – Wales’ scheme.
If you meet the eligibility criteria, the Help to Stay - Wales scheme offers support to homeowners in the form of a shared equity loan.
How does it work?
Local authorities in Wales may also be able to help you under their mortgage rescue schemes – see Shelter Cymru to find out if you’re eligibleOpens in a new window
If you live in Scotland and you're at risk of having your home repossessed, the Home Owners' Support Fund may be able to help you stay in your home.
Run by the Scottish Government, it's made up of two schemes:
Find out what can you do if your lender starts repossession action
Your lender must treat you fairly. And they should only start court action as a last resort after considering all the alternatives to help you stay in your home and not within 12 months of your first missed payment. But if things do get to this stage, there are things you can do.
The Housing Loss Prevention Advice Service can help you if you live in England or Wales and are at risk of being evicted from your property due to mortgage arrears.
This means you’re entitled to get free legal advice and representation in court from the moment you receive a written notice from a creditor.
A housing expert funded by the government will work with you to identify what has triggered the possession claim and recommend solutions. They might be able to give you free legal advice on:
If you're unable to resolve matters and are asked to attend a court hearing, a housing adviser can also provide free legal advice and representation at the court.
If you do have to go to court, it's important you attend. Your lender will have a better chance of repossession if you don’t attend. It’s important you keep talking with your lender about possible repayment options.
Get free debt advice if you’re thinking of resorting to any of the options below – the chances are, there’s a better solution and they’ll be able to help.
Talk to a free debt advice organisation as they may be able to suggest other options.
Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.
