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How to deal with missed mortgage payments

You can get early legal advice if your home is at risk.

Early advice is free no matter what your income is.

Missing a mortgage payment does not mean you will lose your home.

Most lenders do not start repossession action until you have missed at least 3 payments.

Even then it should be a last resort and they should delay if you agree a repayment plan.

If you cannot afford food and other essentials, you could get an emergency grant or loan.

Get debt advice

A debt adviser can help you:

  • work out a budget

  • prioritise your debts

  • get more time to deal with debt

  • speak to your lender and other companies you owe money to

The breathing space scheme can help people with mortgage arrears.

It pauses the repossession process for up to 60 days while you get debt advice.

Pay as much as you can

It's better to pay something even if you cannot afford your full monthly payment.

Small regular payments help to build trust with your lender. They show you can:

  • stick to a budget

  • prioritise your mortgage arrears

Work out a plan to pay off mortgage arrears.

Show your lender you can pay back the missed payments over time.

Contact your mortgage lender

Speak to your lender as soon as you think there might be a problem.

Ask how they can help you.

Tell them when your situation should improve. For example, the date you will:

  • start a new job or take on more hours

  • go back to work after maternity or sick leave

  • get benefits or support for mortgage interest (SMI) payments

Your lender can be more helpful if you tell them about problems early on.

If you've not missed a mortgage payment yet

If you're struggling with higher mortgage interest rates you could:

  • extend your mortgage term

  • switch to interest only payments for 6 months

These options can reduce your monthly payments now. But they will cost more over the lifetime of the mortgage.

Most banks and building societies have signed the government's mortgage charter.

If your lender has signed, you will not need an affordability check.

Your lender still needs to do an affordability check if you want to:

  • change to an interest only mortgage permanently

  • extend your mortgage term beyond your expected retirement date

Ask about a payment break

Payment breaks can be a useful option if your situation is likely to improve soon.

But they can affect your credit score.

You must agree a payment break with your lender. Do not just stop paying anything.

Your lender can reduce or stop your payments for a set period of time.

Your payments usually go up after the payment break ends. This is because any money you did not pay during the break is added to the amount you owe.

Mortgage payment breaks are also called payment holidays.

StepChange has more on payment holidays.

Apply for benefits

If your income has dropped, you could get:

You could get a support for mortgage interest (SMI) loan from the DWP if you get these benefits or another low income benefit.

SMI is not a benefit and has to be paid back with interest when your home is sold.

Get independent financial advice before you apply.

Check you are getting everything that you should be.

Use the entitledto benefits calculator to see what you could get.

Check if you have insurance

You may have taken out insurance when you took on the mortgage.

Insurance could cover your mortgage payments for a time if you've lost your job, or cannot work because of an accident or ill health.

The most common types of insurance that can help are:

  • mortgage protection insurance

  • income protection insurance

  • critical illness cover

Check with your lender or broker if you're not sure if you have this type of insurance.

Selling your home

You may be thinking about selling your home, for example, to downsize or pay off debts.

Speak to a debt adviser before selling as there could be other options available. You might need financial advice if your situation is complex.

If your lender starts court action

You still have time to get advice and support.

Most lenders have signed the government's mortgage charter.

It says that people with mortgages will not be forced to leave their home within a year of their first missed payment.

Last updated: 15 August 2023

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