What to do if your struggling with your mortgage payments

With the cost of living and inflation increasing it is important to know what to do if you are struggling to make or keep up with your mortgage payments.

We want to help you avoid a mortgage missed payment or mortgage default.

The most important thing is do not channel your inner ostrich, stick your head in the sand and do nothing.

The Mortgage lenders want to work with you to achieve an outcome that works for all parties concerned.

Work out what you can afford

You should work out how much you can afford to pay towards your mortgage, this will be the first question that anyone will ask as soon as you speak to them.

If you have mortgage debt, you’ll have to discuss with your lender how you’re going to deal with it and how you’re going to afford the ongoing mortgage costs. 

To work out how much money you’ve got coming in and going out, you can use citizens’ advice’s budgeting tool. 

Talk to your lender

If you’re struggling to pay your mortgage, you should contact your lender as soon as possible. They will talk to you about ways to work around your problem in the short term but also a realistic long-term solution;

Depending on your circumstances, your lender might offer you the option to:

• Change when you pay – you might be able to take a payment holiday from paying your mortgage for a few months
• Repay what you owe at a later date – you could arrange to have what you owe added to the capital outstanding on the mortgage. This is called ‘capitalising the arrears’
• Reduce your monthly interest payments – you might be able to negotiate a lower interest rate if you have equity in your property 
• Reduce the amount you pay for a short period of time – you might be able to pay less towards your mortgage for the next few months
• Repay your mortgage over a longer period – this is called extending the mortgage term
• Change to interest-only payments – this is where you only pay off the interest on what you borrow each month
• Switch to a cheaper mortgage – you might be able to reduce your payments by changing to a fixed-rate mortgage.

Reducing non-essential expenditure

It might be worth checking your direct debits and cancelling anything that’s not offering you value for money. You might also consider switching providers for things like broadband or energy.

Check if you have insurance

If you’ve lost your job or your income unexpectedly, check if you haven’t previously taken out any insurance to cover these eventualities. You might have taken a policy out when you got your mortgage or later. Your insurance might not be with your lender but may provide you with the vital help you need.

There are circumstances when your payment protection policy won’t pay out. You’ll need to check the terms and conditions of your policy carefully to see if you’re covered, if we have arranged some insurance for you, please call us we would be very happy to help you with any claims.

Check if you’re eligible for benefits

You can check what benefits you might be able to get on a website called Entitledto

You’ll need to input information about savings, income, pension, childcare payments and any existing benefits for you and your partner.

Selling your home to pay your debts

A lot of clients ask us ‘’Can I sell my house with mortgage arrears’’ If you don’t have enough money to carry on paying your mortgage or the arrears, you might decide that the best course of action is to sell your home. You shouldn’t do this without getting financial advice. Selling your home might seem like the only option when your financial situation is difficult, but there might be other ways of dealing with the problem until your circumstances improve. You should also be aware that if you have any difficulty selling your home, you’re still liable for all the costs until it’s sold.

What about refinancing your mortgage to make it more affordable?

This can be done, but please be warned if you have mortgage missed payments on your credit file this may mean approaching a new lender isn’t an option. Ultimately this could result in a mortgage default meaning it will be harder for you to obtain a mortgage in the future.