How to deal with mortgage arrears


Agree a repayment plan with your lender

You can propose an arrears repayment plan to your lender even if court action to repossess your home has started.

What your repayment plan should include

Present a plan that shows your lender you can pay your monthly mortgage payment and clear your arrears over time.

Put your proposal in writing. Include:

  • contact details and your address
  • mortgage reference number

Attach your current financial statement.

Work out a minimum payment offer

In most cases you need to show that the arrears can be cleared by the end of the mortgage term.

How to calculate a minimum payment offer:

Amount of arrears ÷ number of months until mortgage end = minimum payment

Example: You have £3000 arrears and have 10 years (120 months) until the end of your mortgage term. You could offer £25 a month towards the arrears.

This is the minimum payment a court can usually accept in order to stop a repossession going ahead.

It's better to repay the arrears sooner in larger instalments if you can afford to do so.

Explain your situation

Tell your lender why you've struggled to make your payments. If your situation will improve, say when this will happen.

For example, the date when you:

  • go back to work after maternity leave
  • start a new job or take on more hours
  • start to get benefits or SMI payments

Make sure you update your financial statement to show these changes.

If you decide to sell your home

You can ask the lender for time to sell your home if it's unaffordable and your financial situation is unlikely to improve.

Your proposal should set out the steps you've taken or intend to take. Include dates when you expect things to happen. For example, instructing an estate agent or solicitor, accepting an offer, exchanging contracts.

Evidence to prove your circumstances

Include proof of anything relevant to support your proposal.

For example:

  • evidence of your income from all sources
  • copy of letters about benefits claims

Your lender might ask you for further information or evidence.

If the lender turns down your proposal

Your lender should write to you within 10 days giving reasons if they refuse your proposal.

Your lender may suggest an alternative proposal. They must give you a reasonable amount of time to respond.

Keep copies of all your letters and emails to your lender. These can be used as evidence that you tried to come to a reasonable arrangement.

If the case goes to court

If you can't reach an agreement, your lender will usually start court action.

You can explain your proposal to the court. 

The court could decide your lender has to accept it.


Last updated 31 Oct 2019 | © Shelter

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