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Cutting down your monthly mortgage costs

This advice applies to Scotland

This information applies to Scotland only.

Coronavirus - if you can't pay your mortgage

If you ask your mortgage provider, they might agree to pause your mortgage payments for three months. This is called a 'payment deferral'. 

You can't get a payment deferral after 31 March 2021, so make sure you ask your mortgage provider for one before this date.

If you already have a payment deferral, you might be able to extend it to a total of six months.

Think carefully about whether any changes to your mortgage payments are right for you. When your payment deferral ends, you'll need to make up for the payments you missed, plus interest added during the deferral. This means you'll have to either:

  • pay more each month
  • keep paying for longer. 

You might have other options to keep paying your mortgage, like increasing your income by claiming benefits, or claiming on an insurance policy.

You can check if you should ask for a payment deferral and what else you can do if you can't pay your bills.

This page tells you about some of the things you could do to stop yourself from falling behind with your mortgage payments and getting into debt.

You'll have to negotiate with your lender to make any of these changes to your mortgage. It will be easier to do this if you've planned your budget. To do this, you can use our budget fact sheet.

Before you agree to make any changes to your mortgage, you should ask your lender if there'll be a charge for this, like a redemption or administration charge, and how much this will be. You should take account of this in your budget.

Switching to a cheaper mortgage or insurance deal

You might be able to switch to a cheaper mortgage with the same lender. Many lenders offer a range of mortgages, and you might be able to change yours to one with lower monthly costs - for example, because the interest is at a fixed rate for a fixed period.

You should get independent financial advice before changing your mortgage with your current lender.

You might find a cheaper mortgage deal with another lender. You might have to pay charges for changing your mortgage lender, and you'll still have to pay off any arrears. There's information about different types of mortgage on the Money Advice Service website.

You might be able to cut down on other costs by switching to cheaper mortgage protection insurance, buildings or contents insurance if these were organised at the same time as your mortgage. You can get information about switching your insurance provider on the Money Advice Service website.

Cutting down your monthly payments

There are several ways you might be able to cut down your monthly payments to your lender.

Reduce your monthly interest payments

Your lender will probably only agree to this if there's equity in your property. This means that the property must be worth more than the amount that is owed on the mortgage.

Change to interest-only payments

This will reduce your monthly costs if you were paying off the capital as well as interest each month.

Temporarily reduce or stop repayments of the capital you borrowed

You can ask for a payment deferral on the capital, but you might only be allowed this if you have short-term financial difficulties.

Increase the period over which the mortgage is paid

This would be more than just a temporary option and would mean you pay more interest in the long term.

Changing payments on your endowment policy

You might be able to:

  • reduce the payments on your endowment policy - if you have an endowment mortgage, but see the warning below
  • stop making payments into your endowment policy - but you'll have to make up these payments at a later date.

Making any changes to an endowment policy can be complicated and financially risky. You should get independent financial advice first if you're thinking of doing this.

Cutting down payments on shared-ownership and shared-equity properties

If you own your property through a scheme that helped you buy your property, you'll have either:

  • shared ownership and you pay rent and a mortgage - you'll usually share ownership with a registered social landlord, or
  • shared equity and you pay a mortgage - you'll share ownership with the Scottish government under a scheme such as LIFT, the New Supply Shared Equity scheme or the Open Market Shared Equity Scheme.

If you're having financial problems, you might be able to reduce your mortgage payments by selling back some of your stake in the property to the landlord or other part owner. You should contact the lender as soon as possible.

Read more about dealing with your mortgage lender.

If you have difficulty meeting your mortgage or rent payments, or you're already in debt, you should get help straight away from an experienced debt adviser, for example at a Citizens Advice Bureau. Find out where to get advice.

Independent financial advice

Several organisations can help you find an independent financial adviser, for example Unbiased, the Chartered Institute for Securities & Investment and the Personal Finance Society.

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