Mortgage Arrears and How to Avoid Repossession

The single most important step is to contact your lender straight away, before you miss a payment if you can see trouble coming. Lenders deal with this all the time and would far rather agree a plan than repossess. Under Financial Conduct Authority rules, your lender must:

• ✓Treat you fairly and consider any reasonable request to change how you pay
• ✓Give you reasonable time to pay the arrears
• ✓Tell you about any shortfall and how it's being dealt with
• ✓Only start repossession as a last resort, after other options have been tried

• ✓A payment arrangement, paying the arrears off gradually on top of your normal payments
• ✓Extending the mortgage term, which lowers monthly payments (you pay more interest overall)
• ✓Switching to interest-only temporarily, reducing payments for a period
• ✓A payment deferral or reduced payments for a short time while you get back on your feet
• ✓Changing your payment date, if that helps it line up with your income

Many lenders have also signed up to the Mortgage Charter, a voluntary commitment to support borrowers in difficulty, ask your lender what support they offer. Get any agreement in writing.

If you get a qualifying benefit, you may be able to get Support for Mortgage Interest. Important points:

• ✓It's a loan, not a free benefit, paid direct to your lender towards the interest on your mortgage, and repaid with interest when you sell or transfer your home
• ✓Qualifying benefits include Universal Credit, Pension Credit, Income Support, income-based JSA and income-related ESA
• ✓There's usually a waiting period, none if you get Pension Credit, but normally around 3 months for Universal Credit
• ✓It covers the interest, not the capital, and it does not pay off existing arrears

If an arrangement can't be reached, the lender can apply to court for a possession order, but going to court does not automatically mean you lose your home:

• ✓You'll get notice of a possession hearing, always attend, or send someone, and explain your situation
• ✓The judge can adjourn the case, or make a 'suspended possession order' that lets you stay as long as you keep to a payment plan
• ✓Free duty advisers are usually available at court on the day to help you for free
• ✓An outright possession order is the last resort, and even then there are steps before you have to leave

You don't have to face this alone, and you should never pay for debt advice. Free, independent help is available from StepChange, National Debtline and Citizens Advice, and a free debt adviser can negotiate with your lender for you. You can also consider Breathing Space, which pauses most creditor action and interest for 60 days while you get advice. See also dealing with debt and our guide to eviction if you rent rather than own.