How to talk to your lender about arrears

Contact your mortgage lender as soon as possible if you are having difficulty paying your mortgage or if your mortgage arrears are increasing.

Talk to your lender about mortgage arrears and payment problems

Try to come to an arrangement with your lender if you have mortgage arrears or you're likely to have mortgage arrears in the future.

Taking action helps put you in control.

You may not want to negotiate with your lender over missed payments or mortgage arrears. But your lender would prefer to help you deal with your problems.

Explain to your lender if you are going to get specialist advice on your options. This shows that you are taking the problem seriously and that you want to put things right.

Make a plan to deal with mortgage arrears

Your lender will expect you to come up with a plan for dealing with your mortgage arrears.

Try to make a plan to show your lender how you'll deal with missed payments and mortgage arrears.

This plan should show that you can pay off your mortgage arrears over a reasonable period of time and that you can keep up with future payments until your mortgage is completely repaid.

To help you with making a plan, you could:

  • produce a detailed household budget – use the Money Advice Service budget planner to help with this
  • work out whether it would be possible to increase your income and save money on your spending – try to make these calculations as precise as possible. Find out more from Money Saving Expert about ways to boost your income
  • find out if you can make changes to your mortgage to make it more affordable
  • do some research to compare different mortgages

Get help to make a plan. Use Shelter's directory to find an adviser in your area.

Make a proposal to manage mortgage arrears

You can either write to your mortgage lender or make an appointment with them to discuss your situation.

Your proposal to manage your mortgage arrears should:

  • give details of your mortgage and the background of the problem
  • explain any changes in circumstances which led to the arrears (for example losing a job, a death in the household, having a baby, unexpected expenses)
  • include a detailed statement of your income, spending and debts – use the Money Advice Service budget planner to help
  • set out the changes that you propose to make and how these will enable you to pay your mortgage and any arrears

If you have a previously good record in paying the mortgage you should include this information in your proposal.

Explain any plans you have to increase your income or reduce your spending. Try to make calculations as accurate as possible.

Set out any changes you want to make to the mortgage and how the new arrangements affect your future payments. For example you could ask for a better loan rate or to take a temporary payment holiday.

You could ask about switching to a different mortgage. Ask if it is possible to either waive any redemption penalty or fees or add them onto your mortgage and pay them off over the rest of your new mortgage term.

Find out more about making a proposal to manage your mortgage arrears.

Ask your lender for more time

Ask for more time if your lender has already threatened to repossess your home.

You could suggest that your proposals are allowed on a trial basis, to be reviewed after an agreed amount of time.

Find out more about ways to avoid repossession.

Ask your lender about mortgage arrears charges

Your lender may charge monthly penalty fees if you miss or are late paying mortgage payments. These are added to the total amount that you owe.

Ask your lender to explain any charges it has made.

Lenders regulated by the Financial Conduct Authority (FCA) must:

  • not apply a monthly arrears charge if you have already made an agreement to repay the arrears
  • put all payments that you make towards clearing missed monthly payments, rather than towards penalty fees
  • record all telephone calls they have with you about your arrears
  • keep records for three years
  • only use repossession as a last resort

Use the FCA's financial services register to check whether your lender is regulated.

Suggest a review of your situation

If you have made realistic proposals to manage your mortgage arrears, you could suggest that your mortgage lender looks at your case again after a few months.

This gives you the chance to prove to them that you are able to meet the revised repayments and manage your mortgage arrears.

Keep to your agreement with your lender

Keep to the agreement you make with your mortgage lender to manage mortgage arrears.

If you don't keep to your agreement, it will be more difficult to negotiate with your lender in the future.

Use the Money Advice Service budget planner to help you work out your finances.

Contact National Debtline for help and advice.

Get advice if you can't keep to your agreement

Get advice immediately if you have already negotiated an agreement to manage mortgage arrears but are having problems keeping up with it.

An adviser may be able to help you to persuade your lender to negotiate further changes to what has been agreed.

Use Shelter's directory to find a housing adviser

If your lender rejects your proposals

Get advice about what to do next if you can't come to an arrangement with your lender about how to deal with your mortgage arrears.

You may have to consider selling the property and moving somewhere more affordable.

You may be able to sell a share in the property back to the housing association if you bought your home through a shared ownership scheme.

You will have an opportunity to argue your case if your lender takes you to court to repossess your home. Courts have options in mortgage arrears repossession cases and usually only order you to leave if other options haven't worked.

If your lender starts court action, you must prepare your case and attend court on the day of the hearing.

Use Shelter's directory to find a housing adviser


Last updated 24 Jan 2017 | © Shelter

If you need to talk to someone, we’ll do our best to help

Get help

Was this advice helpful?

Email a link to this article

Thank you - your message has been sent.

Sorry! - your message has not been sent this time.

Please contact #########

Was this advice helpful?

Thank you - your feedback has been submitted to the team.

Sorry! - your message has not been sent this time.

Please contact website@shelter.org.uk