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Time orders in mortgage arrears possession cases

This content applies to England & Wales

What time orders are and when the court might grant such an order.

Borrowers facing a claim for possession can apply to the court for a 'time order' to reschedule a regulated mortgage contract (RMC) over a longer period and obtain more time to pay. The court can alter the term of the loan and reduce the amount of interest payable if it is just to do so.

Time orders do not apply to mortgages that are not RMCs.

When will the court grant a time order?

A court will only grant a time order if it considers it just to do so.[1] In determining if it is 'just', the court must have regard not only to the borrower's situation, but also to the lender's interest.[2] If the court considers it just to grant a time order, it will specify the new terms of repayment. A time order will not be granted if the borrower cannot show that s/he can meet the repayments required by the court.

When the court considers whether to grant a time order in possession proceedings, the whole of the outstanding amount owed will be taken into account.[3] The court also has the power to vary the agreement as a consequence of the time order.[4] It can order that no further interest or a reduced rate of interest be payable, so that the repayments stay within the borrower's means without increasing the term of the loan for an unacceptable length of time. In one case, the Court of Appeal reduced a high rate of interest to nil for the remaining term of the loan.[5] The court can extend the term of the loan where necessary.

Reasons for requesting a time order

A time order may be an appropriate remedy where:

  • current circumstances make payment impossible but an improvement in circumstances is likely to occur because of, for example, working increased hours, benefits coming into payment
  • the borrower's mortgage term is at an end and there is an outstanding balance to be paid
  • compound interest being added to the balance means the amount owed is increasing and will never be paid off.

Conditions for making a time order

The court can make a time order in an action brought by a lender to enforce an RMC.[6] A time order can be made by filing a defence in possession proceedings or on application where proceedings have been commenced by the lender.[7] The borrower cannot make an application for a time order before the lender has taken court action.

Time orders were formerly an option for second mortgages regulated under the Consumer Credit Act regime only. The Consumer Credit Act 1974 Part XI (judicial control) was amended on 1 April 2014 to include Regulated Mortgage Contracts in that part.[8] This applies to Regulated Mortgage Contracts whenever made.[9]


The Court of Appeal considered the court’s powers in making a time order and set out a six point test:[10]

  • the court must first consider whether it is just to make a time order
  • a time order should normally be for a set period to deal with temporary financial difficulty
  • the court should consider what instalments would be reasonable, having regard to the borrower’s means
  • the court may amend the original agreement as a consequence of the order
  • when dealing with the ‘sums due’ under the agreement, the court should consider the consequences for the term of the loan and the rate of interest
  • the court should suspend possession as long as the terms of the time order are maintained by the borrower.

Future improvements in prospects can be taken into account if these are reasonable and not simply hope or speculation.[11]

Applying for a time order

When faced with a possession claim, the borrower can complete the defence form and state that s/he wishes the court to consider a time order, or s/he can apply subsequently by notice.[12] Even if no specific request for a time order is made, the court may still consider whether or not to grant one.[13] If the court decides to make a time order, possession will be suspended on the same terms.[14]

Where the borrower indicates on the defence form that s/he wishes to apply for a time order, there is no fee payable, otherwise the standard application on notice fee applies unless the applicant is entitled to full or part fee remission. Applying for a time order is complex and it may be necessary to have representation from an experienced lay advocate or a solicitor.

Where the borrower has indicated her/his intention to apply for a time order on the defence form, an adjournment should be requested at the hearing in order to file a full defence. As time orders are a specialist area of money advice, a borrower may benefit from the support of a money advice agency.

[1] s.129(2) Consumer Credit Act 1974.

[2] Southern and District Finance Plc v Barnes and another : J & J Securities Ltd v Ewart and another : Equity Home Loans Ltd v Lewis 27 HLR 691, CA.

[3] Southern and District Finance Plc v Barnes and another : J & J Securities Ltd v Ewart and another : Equity Home Loans Ltd v Lewis 27 HLR 691, CA.

[4] s.130(6) Consumer Credit Act 1974.

[5] Southern and District Finance Plc v Barnes and another : J & J Securities Ltd v Ewart and another : Equity Home Loans Ltd v Lewis 27 HLR 691, CA.

[6] s.126(2) Consumer Credit Act 1974.

[7] para 7.1, CPR PD 55.

[8] s.129(2) Consumer Credit Act 1974.

[9] FCA, PERG 4.4A.1B.

[10] Southern and District Finance Plc v Barnes and another : J & J Securities Ltd v Ewart and another : Equity Home Loans Ltd v Lewis 27 HLR 691, CA.

[11] First National Bank v Syed [1991] 2 All ER 250.

[12] para 7.1, CPR PD 55.

[13] s.129(1)(c) Consumer Credit Act 1974.

[14] Southern and District Finance Plc v Barnes and another : J & J Securities Ltd v Ewart and another : Equity Home Loans Ltd v Lewis 27 HLR 691, CA.

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