Struggling to Pay Your Mortgage? What to Do and Where to Get Help

If you're struggling to pay your mortgage, you're not alone. Many homeowners face financial difficulties at some point, whether due to job loss, illness, relationship breakdown, or unexpected expenses. The key is to act quickly and understand your options. This comprehensive guide explains what to do if you can't pay your mortgage, where to get help, and how to protect your home.

What Should I Do If I Can't Pay My Mortgage? Quick Answer

If you're struggling to pay your mortgage, contact your lender immediately—don't wait until you've missed payments. UK lenders are required by the Financial Conduct Authority (FCA) to treat customers in financial difficulty fairly and must work with you to find a solution. Options may include payment holidays (mortgage payment deferrals), reduced payments, extending your mortgage term, or switching to interest-only temporarily. Free debt advice is available from StepChange (0800 138 1111), Citizens Advice (0800 144 8848), MoneyHelper (0800 138 7777), and National Debtline (0808 808 4000). Acting early gives you more options and helps protect your home from repossession.

Why You Must Contact Your Lender Immediately

The single most important action if you're struggling with mortgage payments is to contact your lender as soon as possible. Don't wait until you've missed payments or fallen into arrears.

Why early contact is critical:

• Lenders have more options to help you before you fall into arrears
• You'll avoid late payment fees and additional charges
• It prevents damage to your credit score and credit file
• It demonstrates you're being responsible and proactive about the situation
• Lenders are required by the Financial Conduct Authority (FCA) to treat customers in financial difficulty fairly
• Early intervention can prevent repossession proceedings from starting
• You'll have time to explore all available options and make informed decisions
• Your lender can explain what support they specifically offer

Lenders would much rather work with you to find a solution than start repossession proceedings, which are costly, time-consuming, and a last resort for everyone involved.

Common Reasons People Struggle with Mortgage Payments in the UK

Understanding why you're struggling helps you explain your situation to your lender and access appropriate support.

Job Loss, Redundancy, or Reduced Income

Redundancy, reduced working hours, loss of overtime, or being furloughed can significantly impact your ability to pay your mortgage. This is one of the most common reasons for mortgage payment difficulties in the UK.

Illness, Injury, or Disability

Health problems that prevent you from working or result in medical expenses can make mortgage payments unaffordable. Long-term illness, disability, or caring responsibilities can have a particularly severe impact on household income.

Relationship Breakdown, Separation, or Divorce

Separation or divorce often means one income must cover costs previously shared by two people. This can make mortgage payments on the family home difficult or impossible to maintain alone.

Interest Rate Increases and Mortgage Rate Changes

If you're on a variable rate mortgage or your fixed rate period has ended, rising interest rates can significantly increase your monthly payments, making them unaffordable. This has affected many UK homeowners in recent years.

Unexpected Expenses and Emergency Costs

Major home repairs, boiler breakdowns, car problems, or other unexpected costs can deplete savings and make it difficult to meet mortgage payments alongside other essential expenses.

Increased Cost of Living

Rising costs for energy, food, council tax, and other essentials can squeeze household budgets, leaving less money available for mortgage payments each month.

Debt Accumulation and Multiple Financial Commitments

Credit card debt, personal loans, car finance, or other financial commitments can become overwhelming and make mortgage payments difficult to maintain alongside other debts.

What Options Can Your Lender Offer If You're Struggling?

UK lenders have various options to help customers in financial difficulty. What's available depends on your individual circumstances and the lender's specific policies.

Payment Holiday (Mortgage Payment Deferral)

A payment holiday allows you to pause your mortgage payments temporarily, typically for a few months (usually 3-6 months). The missed payments are added to your mortgage balance, and you'll pay interest on them. This can provide breathing space whilst you get back on your feet.

Important considerations about payment holidays:

• Interest continues to accrue during the payment holiday period
• Your total mortgage balance will increase
• It may be recorded on your credit file and could affect your credit score
• It's a short-term solution, not a long-term fix for affordability problems
• You'll need to resume full payments afterwards
• Your lender will want to understand your plan for resuming payments

Reduced Payments (Temporary Payment Arrangement)

Your lender may agree to accept reduced payments for a temporary period. This is less than your normal payment but more than nothing, helping you manage whilst your circumstances improve. This is often used when you have a temporary income reduction.

Extending Your Mortgage Term

Extending the length of your mortgage (for example, from 20 years remaining to 25 or 30 years) reduces your monthly payments by spreading the cost over a longer period. However, you'll pay significantly more interest overall and be in debt for longer.

Switching to Interest-Only Payments Temporarily

If you're on a repayment mortgage, switching to interest-only payments temporarily reduces your monthly payment. You'll only pay the interest, not the capital, so your mortgage balance won't reduce during this period. You'll need a plan for how to repay the capital eventually.

Capitalising Arrears (Adding Arrears to Your Mortgage)

If you've already fallen into arrears, your lender may agree to add the arrears to your mortgage balance and recalculate your payments. This clears the arrears but increases your overall debt and the total interest you'll pay.

Changing Your Mortgage Product or Remortgaging

If you're on a high interest rate, switching to a different mortgage product with a lower rate could reduce your payments. However, this depends on your circumstances, whether you meet current lending criteria, and any early repayment charges on your existing mortgage.

Understanding mortgage fees when remortgaging and which lenders might be suitable for your situation can help if you're considering remortgaging to reduce payments.

Free Debt Advice Services in the UK

Several organisations offer free, confidential debt advice to help you manage mortgage payment difficulties. These services are completely free and can provide expert guidance.

StepChange Debt Charity

StepChange is the UK's leading debt charity offering free debt advice. They can help you create a debt management plan, negotiate with creditors on your behalf, and provide ongoing support throughout your financial difficulties.

• Website: www.stepchange.org
• Phone: 0800 138 1111
• Free and confidential service with no charges
• Can help with all types of debt, including mortgages and priority debts
• Online debt advice tools and budgeting calculators

Citizens Advice

Citizens Advice provides free, independent, confidential advice on debt, housing, and financial problems. They have local offices across England and Wales and extensive online resources.

• Website: www.citizensadvice.org.uk
• Phone: 0800 144 8848 (England) / 0800 702 2020 (Wales)
• Face-to-face advice at local Citizens Advice offices
• Help with understanding your rights and legal options
• Can help you communicate with your lender

MoneyHelper (Government Service)

MoneyHelper is a free government service offering guidance on money, pensions, and debt. They provide impartial advice on managing debt and mortgage difficulties, backed by government funding.

• Website: www.moneyhelper.org.uk
• Phone: 0800 138 7777
• Free and impartial guidance from government-backed service
• Tools and calculators to help you budget and plan
• Webchat and WhatsApp support available

National Debtline

National Debtline offers free debt advice by phone and online. They can help you prioritise debts, deal with creditors, and understand your options for managing mortgage arrears.

• Website: www.nationaldebtline.org
• Phone: 0808 808 4000
• Free and confidential advice service
• Specialist advice on priority debts like mortgages and rent
• Sample letters and fact sheets available online

Shelter (Housing Charity)

Shelter provides free housing advice, including specialist help with mortgage arrears and repossession. They can advise on your rights, court procedures, and options to keep your home.

• Website: www.shelter.org.uk
• Phone: 0808 800 4444
• Specialist housing and mortgage arrears advice
• Can help if you're facing repossession proceedings
• Legal advice and court representation in some cases

Government Support and Benefits for Mortgage Help

Depending on your circumstances, you may be entitled to government benefits that can help with mortgage costs.

Support for Mortgage Interest (SMI)

SMI is a government loan that helps pay the interest on your mortgage if you're receiving certain means-tested benefits. It's important to understand that SMI is a loan, not a grant, so you'll need to repay it when you sell your property or transfer ownership.

Key points about Support for Mortgage Interest:

• Available if you receive certain benefits like Universal Credit, Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, or Pension Credit
• Only covers mortgage interest payments, not capital repayments
• There's usually a waiting period (typically 9 months for most benefits) before you can claim
• It's a loan secured against your property as a second charge
• Interest is charged on the SMI loan itself
• You must repay the full amount when you sell your home or transfer ownership
• There are limits on the amount of mortgage that qualifies

Apply for SMI through the government's SMI service provider. More information: www.gov.uk/support-for-mortgage-interest

Universal Credit

If you're on a low income or out of work, you may be entitled to Universal Credit, which can include help with housing costs. The housing element can help with mortgage interest in some cases, though this is now provided through SMI (see above).

Check your eligibility and apply: www.gov.uk/universal-credit

Council Tax Reduction

Reducing your council tax bill can free up money for mortgage payments. Most councils offer council tax reduction schemes (sometimes called Council Tax Support) for those on low incomes or receiving certain benefits.

Contact your local council to check eligibility and apply.

Other Benefits You Might Be Entitled To

Depending on your circumstances, you might be entitled to other benefits such as:

• Personal Independence Payment (PIP) if you have a disability or long-term health condition
• Employment and Support Allowance (ESA) if you can't work due to illness or disability
• Carer's Allowance if you care for someone at least 35 hours per week
• Pension Credit if you're over State Pension age and on a low income
• Child Benefit and Child Tax Credit if you have children

Use the benefits calculator at www.gov.uk/benefits-calculators or contact Citizens Advice or MoneyHelper to check what you might be entitled to.

What Happens If You Miss Mortgage Payments?

Understanding the consequences of missed payments helps you appreciate the importance of acting quickly.

After One Missed Payment

Your lender will contact you (usually by letter and phone) to ask why you missed the payment and when you can pay. You may be charged a late payment fee (typically £25-£50). Your credit score may be affected if the missed payment is reported to credit reference agencies.

After Two Missed Payments

Your lender will contact you again and may ask you to complete an income and expenditure form to understand your full financial situation. They should discuss options to help you. Your credit score will be negatively affected as the arrears are reported to credit reference agencies.

After Three or More Missed Payments (Serious Arrears)

You're now in serious arrears. Your lender may:

• Send formal letters about the arrears and potential consequences
• Charge additional late payment fees
• Report the arrears to credit reference agencies (Experian, Equifax, TransUnion)
• Begin legal proceedings if you don't engage with them or make arrangements
• Consider repossession as a last resort if no solution can be found
• Refer your case to their litigation or collections department

Repossession Proceedings and Court Action

Repossession is always a last resort. Before a lender can repossess your home, they must:

• Prove they've tried to work with you to find a solution and treated you fairly
• Follow strict legal procedures set out by the FCA and courts
• Apply to court for a possession order
• Give you opportunities to clear the arrears or make payment arrangements
• Attend a court hearing where you can present your case

Even if repossession proceedings start, you can still negotiate with your lender and potentially stop the process by clearing arrears, agreeing a payment plan, or demonstrating you can afford the mortgage going forward.

Practical Steps to Take Right Now If You're Struggling

If you're struggling with mortgage payments, take these practical steps immediately.

Step 1: Assess Your Complete Financial Situation

Create a detailed budget showing all income (salary, benefits, other income) and all expenses (mortgage, utilities, food, transport, debts). This helps you understand exactly where you stand and what you can realistically afford to pay. MoneyHelper offers free budget planners.

Step 2: Contact Your Lender's Financial Difficulty Team

Call your lender's customer service or financial difficulty team (sometimes called the 'vulnerable customers team'). Explain your situation honestly and ask what options are available. Have your budget information ready to discuss.

Step 3: Get Free Professional Debt Advice

Contact one of the free debt advice services listed above (StepChange, Citizens Advice, MoneyHelper, or National Debtline). They can help you understand your options, negotiate with your lender if needed, and create a sustainable plan.

Step 4: Check Your Benefit Entitlement

Use online benefit calculators at www.gov.uk/benefits-calculators or speak to Citizens Advice to check if you're entitled to any benefits or support you're not currently claiming, including Support for Mortgage Interest.

Step 5: Prioritise Your Debts Correctly

Your mortgage is a priority debt because you could lose your home if you don't pay it. Prioritise mortgage payments over non-priority debts like credit cards, store cards, or personal loans. Other priority debts include council tax, energy bills, and child maintenance.

Step 6: Reduce Non-Essential Spending

Review your budget and cut non-essential spending where possible. Cancel unused subscriptions, reduce entertainment costs, and look for savings on utilities and insurance. Every pound saved can go towards your mortgage payment.

Step 7: Consider Ways to Increase Income

Look for ways to increase your income, such as:

• Taking on extra work, overtime, or a second job if possible
• Selling items you no longer need on eBay, Facebook Marketplace, or Gumtree
• Renting out a room under the Rent a Room Scheme (check your mortgage terms allow this first)
• Claiming all benefits you're entitled to
• Asking for a pay rise or seeking better-paid employment

Step 8: Keep Detailed Records of Everything

Document all communications with your lender, including dates, times, who you spoke to, and what was discussed. Keep copies of all letters, emails, and text messages. This is crucial if you need to prove you've been trying to resolve the situation.

Options If You Can't Keep Your Home Long-Term

If it becomes clear you can't afford to keep your home long-term, there are options that may be better than repossession.

Selling Your Home Voluntarily

Selling your home yourself (voluntary sale) is usually better than repossession because:

• You're likely to get a better price than at a repossession auction
• You avoid 'repossession' appearing on your credit file
• You have more control over the process and timing
• You may have money left over after paying the mortgage and fees
• It's less stressful and damaging to your credit history

Voluntary Repossession (Handing Keys Back)

You can hand the keys back to your lender voluntarily. However, this still counts as repossession on your credit file and you may still owe money if the property sells for less than your mortgage balance plus costs (negative equity and shortfall debt).

Equity Release (For Homeowners Aged 55+)

If you're over 55, equity release (lifetime mortgage or home reversion) might allow you to access money tied up in your home to pay off your mortgage. However, this is a complex decision with long-term implications for you and your family, and requires specialist regulated advice.

Downsizing to a Cheaper Property

Selling your current home and buying a cheaper property could reduce or eliminate your mortgage, making payments more affordable or unnecessary. This releases equity that can improve your financial situation.

How Mortgage Payment Difficulties Affect Your Credit Score

Missing mortgage payments will negatively affect your credit score and credit file, which can impact your ability to borrow in future.

Credit score and credit file impact:

• Missed payments are recorded on your credit file for six years from the date of the missed payment
• The more payments you miss, the worse the impact on your credit score
• Arrears and defaults are particularly damaging to your creditworthiness
• Repossession has a severe long-term impact and makes future borrowing very difficult
• It becomes harder to get credit, mortgages, mobile phone contracts, or even rent privately
• You may face higher interest rates when you can borrow
• Some employers check credit files, so it could affect job applications

This is another reason to act quickly—the sooner you address the problem and make arrangements with your lender, the less damage to your credit score and future financial options.

Protecting Yourself from Future Payment Problems

Once you've resolved your current difficulties, take steps to protect yourself in future.

Build an Emergency Fund

Aim to save enough to cover 3-6 months of essential expenses, including your mortgage. This provides a financial buffer if your income drops or unexpected expenses arise. Start small and build gradually.

Consider Mortgage Payment Protection Insurance (MPPI)

This insurance can cover your mortgage payments if you can't work due to accident, sickness, or unemployment. Check the terms carefully as there are often exclusions (pre-existing conditions, self-employment, certain types of work). Compare policies and read the small print.

Review Your Mortgage Regularly

When your fixed rate period ends, review your options and consider remortgaging to a better deal. This can reduce your monthly payments and make them more affordable. Don't just roll onto your lender's standard variable rate.

Understanding which lenders might suit your circumstances and mortgage insurance requirements helps when remortgaging.

Budget Carefully and Realistically

Maintain a realistic budget and review it regularly (monthly is ideal). Don't overstretch yourself with mortgage payments that leave no room for unexpected expenses or changes in circumstances. Use budgeting apps or spreadsheets to track spending.

Stay Informed About Interest Rates

If you're on a variable rate or approaching the end of a fixed rate, be aware that your payments could increase if interest rates rise. Plan for this possibility and consider fixing your rate for certainty.

Frequently Asked Questions About Mortgage Payment Problems

How many mortgage payments can I miss before my lender starts repossession?

There's no set number of missed payments that automatically triggers repossession. Lenders must follow FCA rules and try to help you before seeking repossession. However, the more payments you miss, the more serious the situation becomes. Contact your lender after the first missed payment to avoid escalation and demonstrate you're trying to resolve the situation.

Will my lender definitely repossess my home if I can't pay?

No. Repossession is always a last resort. Lenders must prove to a court that they've tried to work with you to find a solution and treated you fairly. If you engage with your lender, provide information about your circumstances, and work towards a solution, repossession is unlikely.

Can I get a mortgage payment holiday without affecting my credit score?

Payment holidays arranged with your lender may be recorded on your credit file, though the impact varies between lenders. During the COVID-19 pandemic, payment holidays didn't affect credit scores, but normal rules have resumed. Ask your lender specifically how they will report the payment holiday to credit reference agencies.

What if I can't afford my mortgage after my fixed rate ends?

Contact your lender before your fixed rate ends if you're worried about affordability. You may be able to remortgage to a new deal with lower payments, extend your mortgage term, or explore other options. Don't wait until you're already struggling—proactive contact gives you more options.

Can I rent out a room to help pay my mortgage?

Possibly, but check your mortgage terms first. Some mortgages don't allow lodgers without permission. If it's permitted, the Rent a Room Scheme allows you to earn up to £7,500 per year (2025/26 tax year) tax-free from a lodger. You'll need to inform your lender and possibly your home insurance provider.

What's the difference between mortgage arrears and default?

Arrears means you've missed payments and owe money to your lender. Default is when your lender formally records that you've failed to meet the terms of your mortgage agreement, usually after several missed payments (typically 3-6 months). Default is more serious and has a worse impact on your credit score for six years.

Will I still owe money if my home is repossessed?

Possibly. If your home is sold (usually at auction) for less than you owe on the mortgage (including arrears, fees, legal costs, and interest), you'll still owe the shortfall. This is called a mortgage shortfall debt or deficiency, and your lender can pursue you for it.

Can I switch to interest-only to reduce my payments?

Your lender may agree to this temporarily if you're in financial difficulty. However, you'll need a credible plan for how you'll repay the capital at the end of the mortgage term. This is usually a short-term solution (6-12 months) whilst you improve your financial situation.

What if my partner left and I can't afford the mortgage alone?

Contact your lender immediately to explain the situation. They may be able to help with reduced payments, extending the term, or other arrangements. You may also need legal advice about the property ownership, whether your ex-partner is still liable for payments, and options for removing them from the mortgage or selling the property.

Can I get help with mortgage payments if I'm self-employed?

Yes. The same support options are available regardless of employment status. However, proving your income for benefits like Support for Mortgage Interest or Universal Credit may require additional documentation such as tax returns (SA302 forms), business accounts, or bank statements showing business income.

What happens at a mortgage possession hearing in court?

At a possession hearing, a judge will hear evidence from both you and your lender. You can explain your circumstances, show what steps you've taken, and propose a payment plan. The judge can suspend the possession order if you can demonstrate you can afford to pay the arrears over time. Get free legal advice from Shelter or Citizens Advice before the hearing.

Important Information and Disclaimer

This guide provides general information about mortgage payment difficulties and is not financial or legal advice. Your individual circumstances may require specialist advice from qualified professionals.

For free debt advice, contact StepChange (0800 138 1111), Citizens Advice (0800 144 8848), MoneyHelper (0800 138 7777), or National Debtline (0808 808 4000).

For full details about our services, please read our disclaimer page.

Key Takeaways: Dealing with Mortgage Payment Problems

Essential points to remember if you're struggling with mortgage payments:

• Contact your lender immediately—don't wait until you've missed payments
• Lenders are required to treat customers in financial difficulty fairly and must try to help
• Options may include payment holidays, reduced payments, extending your term, or switching to interest-only
• Free debt advice is available from StepChange, Citizens Advice, MoneyHelper, and National Debtline
• You may be entitled to government support like Support for Mortgage Interest (SMI)
• Missing payments damages your credit score—act quickly to minimise the impact
• Repossession is always a last resort and lenders must follow strict procedures
• Even if you receive a repossession notice, you still have options and rights
• Your mortgage is a priority debt—prioritise it over credit cards and personal loans
• Keep detailed records of all communications with your lender
• Understanding mortgage fees and lender options can help if remortgaging is a solution

Whether you're in Essex or elsewhere in the UK, help is available. The most important thing is to act quickly and not ignore the problem. The sooner you seek help, the more options you'll have to protect your home.