How to make a proposal to a mortgage lender

Find out what to say in a proposal to your mortgage lender about how you'll deal with mortgage arrears.

Why you should make a proposal

Your mortgage lender must follow rules called pre-action protocols. These rules say that your lender must treat you fairly when you have mortgage arrears.

Your lender should try to make reasonable efforts to reach agreement with you about how to deal with your arrears. This includes looking at any realistic proposals you make.

After you make a proposal, your lender must write to you within 10 days to tell you if they don't agree with your proposals.

If your lender accepts your proposal, they won't start court proceedings to repossess your home.

Find out more about repossession rules for mortgage lenders and borrowers.

What your proposal should include

Your proposal should be made in writing and should include:

  • your contact details
  • the address of the property
  • details of your mortgage (including the reference number)
  • information to explain your current situation
  • how you plan to resolve the problem – this could include a number of actions
  • a timescale and date for review
  • evidence of your situation

Explain your current situation

Your lender expects you to explain why your mortgage arrears have built up and why you are unable to make your current mortgage payments.

Tell your lender how long you will be in this situation. Say if your problems are short term or long term.

If possible, give a date when your situation will change. For example, when you:

Explain how you plan to resolve the problem

Your proposal should set out how you plan to manage your mortgage.

For example, you could:

  • change your mortgage to an interest-only mortgage to reduce your monthly costs
  • add the mortgage arrears to your mortgage and repay them over the remaining mortgage term
  • sell an endowment policy to repay part of the mortgage and change the remaining mortgage to capital repayment
  • take a mortgage holiday if you have a flexible mortgage
  • make a claim against a mortgage protection insurance policy
  • make a claim for support for mortgage interest or universal credit help with housing costs
  • take in a lodger

Find out more about what to do if you're facing repossession.

Provide a financial statement

Mortgage lenders expect you to provide a financial statement showing your income and outgoings.

This statement helps your lender to decide if your proposal is affordable.

Use the StepChange Debt Remedy Tool to create a financial statement.

Provide proof of your circumstances

Include proof of anything relevant to support your proposal.

For example:

  • evidence of your income from all sources
  • copies of letters to and from an insurance company if you are making a claim
  • copy letters about benefits claims
  • a valuation of your home
  • copies of letters to and from estate agents if you are selling your home
  • evidence of the sale price of similar homes in your area

Suggest a review date

Your financial statement should show how your finances look over the short-term period and how they could look after this period ends.

Suggest a date for a review of your situation.

If your money problems are long term, your planning may need to be long term too. Your suggested date for review could be quite far in the future.

You must consider if you can afford to stay in your home in the long term and if your circumstances are likely to improve. Your proposal may have to cover the possibility of selling your home.

Get help from an adviser to help you find the best solution for your circumstances.

Find an adviser through Citizens Advice

If your lender doesn't agree to your proposal

The court's pre-action protocol rules say your lender should write to you within 10 days giving reasons if they don't accept your proposal.

Contact your lender again if they don't agree with your proposal. You may need to insist that a more senior person deals with your case. Provide details of your proposal and show that it's a reasonable agreement you can keep to.

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 to back up your case.

Find out more about repossession rules for mortgage lenders and borrowers.

If the case goes to court

If you can't reach an agreement, your lender will take you to court. You will be able to explain to the court that you tried to negotiate. The court could decide your lender should have accepted your proposals.

Find out more about what happens if your mortgage lender takes you to court.

Get help to make a proposal

Contact the Civil Legal Advice helpline on 0345 345 4 345. You may be able to get help from a legal aid lawyer if you claim certain benefits or have a low income.

You can also get help from a Shelter adviser.

Have the papers you received from your lender with you when you speak to an adviser.

Last updated 04 Jan 2016 | © Shelter

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