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Dealing with mortgage arrears

This advice applies to Scotland

Contact your nearest Citizens Advice immediately if because of your mortgage arrears:

  • you’ve been told by your lender that it is applying to court
  • you’ve received court papers
  • you're expecting sheriff officers to enforce the debt with a court warrant

If you get into debt (‘in arrears’) with your mortgage payments, don’t wait for your lender to contact you.

They’ll normally write to you after a missed payment, but you should talk to them as soon as possible.

You may have a secured loan or a second charge mortgage. These have to be given priority too.

More about the options for dealing with your mortgage or secured loan arrears

Lenders legally have to treat you fairly and consider any request you make to change the way you pay your mortgage. They are expected to do everything they can to come to a payment arrangement and repossessing your home should be the last resort.

If it takes you to court to repossess your home it’s still not too late to try to reach an agreement with the lender.

Mortgage arrears are a priority debt. This means you need to pay them before some other debts. Contact your nearest Citizens Advice if you have more than one debt as you can get advice to sort out other debt problems too.

Work out what you can afford

You’ll need to tell your lender how much you can afford to pay back, so it’s a good idea to work out your budget before you call or visit.

You can use our budgeting tool to do this, or you can talk to an adviser at your nearest Citizens Advice.

It’s also a good idea to tell your lender if you’ve been speaking to a debt adviser. This shows the lender you’re serious about dealing with the debt and the debt adviser may be able to negotiate on your behalf if you are very anxious about that.

If you’ve got payment protection insurance, you should check if you can use it to pay the arrears on your mortgage. You might be covered if you’ve been ill or you’ve recently lost your job, for example. 

Ways to pay your arrears

You must discuss the different ways you can pay your mortgage arrears with your lender. If you’ve got any money left over each month after paying essential bills, you could suggest adding a little bit on top of your future monthly payments.

Example

You normally pay £400 a month for your mortgage, but last month you missed your payment.

Instead of paying what you owe in one amount, you could suggest paying it back in 4 monthly instalments of £100.

You’d add this £100 to your regular mortgage payment of £400, so for the next 4 months you’d pay your lender £500 a month.

Other ways of paying off the arrears on your mortgage

If your home is worth more than the mortgage, your lender might let you add your arrears to the total amount you owe and pay it back over the lifetime of the mortgage. This is known as 'capitalising your arrears'.

You might also be able to pay off your arrears using your pension or an endowment policy - which is a type of life assurance. You should not do this without independent financial advice to make sure that in your individual situation this is a wise plan.

More about how to deal with mortgage or secured loan arrears

Reduce your monthly payments

If you’re struggling to pay your mortgage every month, you could ask to:

  • pay the debt over a longer period
  • switch to interest-only payment although lenders are often not keen to agree to this because it leaves outstanding capital at the end of the mortgage period
  • take a break from your payments for a few months - this is known as taking a 'repayment holiday' but lenders are often not keen to agree to this

If you are eligible for benefits, it’s also worth checking if you’re eligible for Support for Mortgage Interest (SMI). You might be able to use SMI to pay the interest on your mortgage.

If you can’t agree a way of paying your arrears

Your lender might ask a court for an order to repossess your home. This lets them sell your home and use the money from the sale to recover the money you owe.

Your lender has to give you notice in writing and negotiate with you.

You can read more about what you can do if your lender is trying to repossess your home.

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