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What should I do if I can't pay my mortgage?

If you find yourself in a position where you can't meet your monthly mortgage payments, it is important not to bury your head in the sand. Help is at hand and there are things you can do to get back on track.

Talk to your lender

If you miss a repayment, do not ignore it - your mortgage provider will notice and chase it up right away.

Your credit rating will be damaged, and at worst your lender may start to put repossession proceedings in place.

Contact your lender as soon as you know you will have trouble meeting a repayment. In most cases they will be able to help you cope by:

  • Offering to defer the payment

  • Allowing you to take a payment holiday

  • Extending your mortgage term so that your repayments are smaller and more manageable

Get help

If you are struggling to meet your monthly mortgage payments, help is available if you are prepared to tackle the problem head on.

Free advice

Another thing you can do if you are having trouble paying your mortgage is to get advice from a free, independently-based debt charity such as:

As well as helping you to draw up a budget so that you can figure out how to meet your mortgage payments, they will give you advice on how to talk to your lender about your repayments.

Contact your mortgage lender

It is often possible to come to an agreement with your lender that will help you to either make payments, or at least take the pressure off while you take steps to get back on your feet financially.

Your lender should work with you to find a way to ensure that you do not lose your home:

  • They may agree to extend the term of your loan, bringing down your monthly payments

  • They may also agree to accept smaller payments in the short term

  • It may be possible to stop making payments for a while, although the missed payments will be added to your overall debt

Government schemes

If you are having serious problems paying your mortgage and are in real danger of losing your home, there is a government scheme that may help you.

The Support for Mortgage Interest (SMI) scheme provides help with mortgage interest payments to some people on the following state benefits:

  1. Income Support

  2. Pension Credit

  3. Income-based Jobseeker's Allowance

  4. Income-related Employment and Support Allowance

The scheme can help you with interest payments on your mortgage or loans you have taken out for home improvements. The benefit is paid directly to your mortgage lender and only covers the interest rather than repaying the capital.

To find out if you are eligible for the scheme and to make a claim, contact Jobcentre Plus or the Pension Service.

GOV.UK's guide to Support for Mortgage Interest

The Scottish Government's Homeowners' Support Fund website

Mortgage support in Scotland

In Scotland, you can apply for the Homeowners' Support Fund (HOSF) if you are struggling to meet your repayments.

Consider a repayment holiday

Your lender may offer you a mortgage payment holiday when you explain your circumstances.

However, interest will still be added to your overall mortgage balance even though you're not making repayments, meaning your mortgage is likely to work out more expensive in the long run.

That said, it can help if you are struggling to meet repayments by allowing you to take a break from your mortgage and defer payment to a later date.

How to take a mortgage payment holiday

Draw up a realistic budget

It is vital that you look at your finances and draw up a budget that you will be able to stick to.

Start by looking at your statements and listing all your outgoings and income. This should help you identify areas in which you could rein in your spending and put that spare cash towards meeting your mortgage repayments.

How to write a budget

Prioritise your debts

If your mortgage is your only debt then you can concentrate on this by putting as much spare money as possible towards meeting repayments.

You could even put your mortgage repayments at the top of your list even if you have other debts like:

  • Credit cards

  • Loans

  • An overdraft

While other debts can be intimidating, it is more important that you have a roof over your head. Put your mortgage at the top of your list but make sure you are doing everything you can to meet the demands of your other debts as well.

What to do if you cannot pay a bill

Continue to pay

If possible, try to at least keep up a minimum level of repayment - even if it is not quite the level originally agreed with your lender.

Discuss this with your lender first, so they know how much you can pay and are aware that you are having difficulty meeting your payments.

This shows your lender that you are at least trying to meet repayments and have good intentions, which may make them behave more leniently towards you.