How to deal with mortgage arrears


Cut your mortgage costs

You can ask your lender for help if you can’t afford to pay your mortgage.

They can give you a 3 month payment holiday if you’re struggling because of coronavirus.

There are other options that might be more suitable for you. 

Ask your lender what other support they can offer.

What is a payment holiday?

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A payment holiday means your lender lets you take a break from making payments.

It could include making reduced payments instead.

The missed payments will be added to the amount you owe for your mortgage.

You can ask your lender for a 3 month payment holiday if you're struggling to pay because of coronavirus. You can do this any time up until 31 October 2020.

You’ll get a warning letter that says you are in arrears. Don’t worry – this is something your lender has to send automatically, even if you’ve agreed a payment holiday.

What happens if you take a payment holiday?

Your monthly mortgage payments will normally increase after the payment holiday ends.

Alternatively your lender may let you pay your mortgage off over a longer period of time.

Your lender should explain what will happen so that you can decide whether to agree.

A payment holiday shouldn’t be recorded as a default on your credit report. But lenders and creditors may be able to see if you’ve taken a payment holiday when deciding whether to lend to you.

What are other options?

Check if you have insurance that will cover your mortgage payments. For example, mortgage payment protection insurance or through your current account.

Ask your lender about other ways they could help. For example, they could:

  • change your mortgage so you only pay the interest
  • extend your mortgage term so you pay less per month

A debt adviser can explain your options to help you decide.

If you want someone to recommend a particular option you need to speak to a regulated financial adviser.

If you’ve already had a payment holiday

If you can afford to pay your mortgage after the 3 months you'll be asked to do so.

It’s best to start making payments again if you can.

Speak to your lender if you still can't afford to make full payments. They should offer you further support.

This could include another 3 month payment holiday or other options, such as extending the term of the mortgage.

If you have a suspended possession order

You may have a suspended possession order if:

  • your lender took you to court in the past
  • you were ordered to make payments towards the arrears.

Taking a payment holiday may mean that you have breached the suspended order.

Normally the lender could then ask bailiffs to evict you. Evictions are on hold so this shouldn’t happen until after 31 October.

Ask your lender for confirmation in writing that they won't ask bailiffs to evict. Get advice if they refuse.


Last updated 04 June 2020 | © Shelter

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