Defaulting on a mortgage

If you miss one mortgage payment, you’re in arrears.

But if you fall two or more months behind, your lender will usually treat this as serious mortgage arrears and may begin taking further action.

This is sometimes referred to as a mortgage default.

Defaulting on a mortgage can have serious consequences.

At first, if you fall behind on your mortgage payments, your lender must contact you to discuss the missed payments and tell you exactly: 

• how much you owe
• what payments you’ve missed
• any charges added

They must then try to agree a way forward with you.

If the situation continues, you may:

• be asked to make a plan to repay the arrears
• be charged extra charges and interest

Falling behind on your mortgage can also affect your credit file.

In more serious cases, your lender could start repossession proceedings.

We should stress though that your lender can’t repossess your home straight away and that this option is usually a last resort.

The first thing you should do is speak to your lender as soon as possible.

They may look at ways of reducing your monthly payments, such as switching to interest-only or extending your mortgage term.

Before speaking to your lender, think about 

• what you can realistically afford to pay
• when your situation might improve
• how you could repay any missed payments

And in the meantime, pay as much as you can, even if you can’t afford the full payment.

Even paying some of what you owe is better than missing payments completely.

UK lenders are regulated by the Financial Conduct Authority and many will have signed up to the Mortgage Charter, which sets out additional support options for borrowers facing payment difficulties.

So they have a duty to treat you fairly and help you find a solution.

They must at least try to agree a solution before repossession and give notice before taking legal action.

If you’re struggling to keep up with your mortgage payments, then there are steps you could take to improve your situation.

Find out what benefits you could claim

You might be able to claim financial support from the government to help you with your living costs.

Use our benefits calculator to see what you could be eligible to receive. 

Manage your household budget

If you’re worried about falling behind with your mortgage, it’s well worth creating a budget.

You’ll then be able to see clearly how much money you have coming in each month and where it’s going.

This will help you prioritise your spending and work out where money can be saved.

You can then feel confident that you’re able to cover vital expenses like mortgage payments, as well as work out what you can afford to spend on non-essentials and put into savings.

Get started with our budget planner - it’s free and easy to use.

Tackle problem debts

We know how overwhelming money worries can be. 

If you’re behind on mortgage payments or worried you will be, then get in touch for confidential, practical and impartial debt advice.