How to deal with mortgage arrears


Increase your income

There may be ways to increase your income so you can afford your mortgage.

Claim benefits

You may be able to claim universal credit if you or your partner:

  • are working age
  • have a low income

If you're both pension age you may be able to claim pension credit to top up your retirement income. 

Use the entitledto benefits calculator to check you're claiming everything you can

Get help with mortgage interest payments

You may be able apply for a support for mortgage interest (SMI) loan.

You must get universal credit, pension credit or another means tested benefit to qualify. 

You usually have to claim benefits for 9 months before you can get an SMI loan. You can apply straight away if you're on pension credit.

You can't usually get any help if you're working. 

Check if you have insurance

You may have taken out mortgage payment protection insurance (MPPI) when you took on the mortgage.

MPPI could cover your mortgage payments for a time in the case of accident, illness or redundancy. 

Check with your lender or broker if you took out a policy with your mortgage.

Talk to family and friends

Talk to trusted family or friends. They may be able to help with a gift or interest free loan if you're struggling.

If you have other adults in your household, explain your financial situation and that your home could be at risk. Ask if they can contribute more towards the household costs.

Rent out a room

Taking in a lodger can be a good way of raising extra money to help you deal with mortgage arrears.

Renting a room can affect your tax or benefits, so check those details first.

Renting out your whole home

You might be able to do this if you have somewhere else to live.

It's only worth doing this if the rent you would receive will cover:

  • your mortgage and any agreed arrears repayment
  • the other costs of being a landlord

You need your lender's permission. If they agree, they will probably want you to transfer to a buy to let mortgage on a higher interest rate.

You take on all the responsibilities of a landlord if you rent out your home. 

Owning a property you don't live in or getting rental income also affects your benefit entitlement. 

Talk to a debt adviser first as there may be better options.


Last updated 31 Oct 2019 | © Shelter

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