How to deal with missed mortgage payments
From 1 August 2023 you can get early legal advice if you are at risk of losing your home because of a mortgage or a loan problem.
This advice is free no matter what your income is.
Search for a local adviser on gov.uk. Tick 'Housing Loss Prevention Advice Service'.
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
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
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 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