Money, Debt and Benefits Help Centre | What Happens If You Can't Pay Your Mortgage?

What Happens If You Can't Pay Your Mortgage?

If you're struggling to pay your mortgage, it is important to act as soon as possible.

Many homeowners experience financial difficulties due to changes in income, rising living costs, illness, unemployment or unexpected expenses. While missing mortgage payments can be worrying, there is often support available and your lender may be willing to discuss options to help you manage the situation.

The sooner you seek help, the more options are likely to be available.

Don't Ignore The Problem

If you think you're going to miss a mortgage payment, contact your lender before it happens if possible.

Ignoring the situation can lead to:

Mortgage arrears increasing.
Additional charges being applied.
Increased contact from your lender.
Legal action in some circumstances.
Greater financial stress.

Speaking to your lender early can often help prevent the situation from getting worse.

What Happens If You Miss A Mortgage Payment?

If you miss a payment, your lender will usually:

Contact you to discuss the missed payment.
Ask about your financial circumstances.
Explain the amount you owe.
Discuss possible repayment options.
Encourage you to seek independent advice.

Most lenders will want to understand what has caused the problem and whether your difficulties are temporary or long-term.

What Should I Do If I Can't Afford My Mortgage?

1. Contact Your Lender

Many lenders have dedicated support teams for customers experiencing financial difficulties.

They may be able to discuss options such as:

Temporary payment arrangements.
Reduced monthly payments.
Extending the mortgage term.
Switching to interest-only payments in some circumstances.
Other forms of support depending on your situation.

2. Create A Household Budget

A budget can help you understand:

Your total household income.
Essential living costs.
Existing debts.
Areas where spending may be reduced.

Having an accurate budget can also help when discussing your situation with your lender.

3. Check Your Income

You may be entitled to benefits or financial support that could improve your situation.

Universal Credit.
Pension Credit.
Personal Independence Payment (PIP).
Carer's Allowance.
Attendance Allowance.

An income maximisation check can identify support you may be missing out on.

4. Seek Advice

Independent money and debt advice can help you understand all the options available and support you in dealing with your lender.

What Is Mortgage Arrears?

Mortgage arrears are missed mortgage payments that have not been brought up to date.

Arrears can build up if:

Payments are missed completely.
Only part of a payment is made.
Payments are made late on a regular basis.

The larger the arrears become, the more difficult they can be to manage.

Can I Get Help With My Mortgage?

Depending on your circumstances, support may be available through:

Support for Mortgage Interest (SMI)

SMI is a government loan that may help with mortgage interest payments for eligible people receiving certain benefits.

Benefit Entitlement Checks

A benefits check may identify additional income that could help with household costs.

Lender Support

Many lenders have arrangements in place to support customers experiencing financial hardship.

What If My Financial Problems Are Temporary?

If your difficulties are expected to be short-term, your lender may be more willing to consider temporary arrangements while your finances recover.

Examples include:

Returning to work after illness.
Temporary loss of income.
Unexpected one-off expenses.
Delayed benefit payments.

Keeping your lender informed can help them understand your circumstances.

What If My Financial Problems Are Long-Term?

If your financial difficulties are likely to continue, you may need to consider longer-term solutions.

This may involve:

Reviewing your budget.
Increasing household income where possible.
Reducing non-essential spending.
Seeking debt advice.
Exploring housing and financial support options.

Professional advice can help you assess the most appropriate course of action.

Can My Lender Take Me To Court?

If mortgage arrears continue to increase and no agreement can be reached, a lender may start legal action.

If you receive:

A solicitor's letter.
Court papers.
A hearing date.

You should seek advice immediately.

Court proceedings do not automatically mean you will lose your home, and support may still be available.

What Is Repossession?

Repossession is when a lender takes possession of a property because mortgage payments have not been maintained.

Repossession is generally considered a last resort.

Lenders are usually expected to consider reasonable alternatives before seeking possession of a property.

If repossession is being discussed, it is important to seek advice without delay.

Warning Signs That You Need Help

You should seek advice if you are:

Missing mortgage payments.
Using credit to pay your mortgage.
Falling behind on household bills.
Struggling to afford essential living costs.
Receiving letters about arrears.
Worried about losing your home.

Early action can make a significant difference.

Common Myths About Mortgage Problems

"I'll Lose My Home After One Missed Payment"

Missing a payment is serious, but lenders will usually follow a process and discuss options before considering legal action.

"There's No Point Contacting My Lender"

Many lenders are willing to discuss support arrangements if you contact them early.

"I Should Prioritise Credit Cards Over My Mortgage"

Your mortgage is normally considered a priority commitment because it affects your home.

"Help Isn't Available For Homeowners"

There may be benefits, grants, lender support and independent advice available depending on your circumstances.

Need Help?

Our advisors can help you:

Understand your mortgage situation.
Create a realistic household budget.
Check your entitlement to benefits and support.
Explore options with your lender.
Access free, confidential money and debt advice.

Contact our team for free, confidential advice and support.

Was this article helpful?

0 out of 0 liked this article

Still need help? Message Us