Mortgage arrears: what to do if you cannot pay

Mortgage arrears simply means you have missed one or more mortgage payments, or you are about to. A mortgage is a priority debt: official guidance is blunt about why, because your lender could repossess your home and sell it to get their money, and so a mortgage should be paid before unsecured debts such as loans and credit cards¹. That is uncomfortable, but it also points to the practical rule that runs through this whole subject: the earlier you act, the more options exist.

Acting early matters because lenders respond to borrowers who engage with them. Your lender will usually delay repossession action if you can show you are prioritising your mortgage arrears and can pay them off over time, and if your lender has not started court action yet it must look at any offer you make². Arrears are common enough that you are not alone: in the second quarter of 2026, mortgages in arrears accounted for 0.89 per cent of all homeowner mortgages outstanding³. This page sets out what your lender can offer, how the Mortgage Charter works, what Support for Mortgage Interest does and does not pay for, when repossession can happen, and where to get free help.

What mortgage arrears are and why acting early matters

Arrears are missed payments that you still owe. They are not written off, and they usually grow, because lenders can add arrears charges and interest to what you owe. One common way of dealing with them gives the term its own definition in the rules: "capitalised mortgage arrears" means any arrears in relation to a mortgage that have been added to the outstanding balance to be paid over the duration of the mortgage⁷. In other words, some lenders will fold what you owe into the mortgage itself and collect it slowly, rather than demanding it all at once.

The reason to act early is that your options narrow as arrears grow. A lender that has not started court action must look at any offer you make, and will usually delay repossession action if you can show you are prioritising the arrears and can pay them off over time². Once court action has begun, the process is harder to stop, though courts can and do stop repossession where a realistic repayment plan is shown. Paying your mortgage will always be a priority payment, meaning these payments come before other debts like loans and credit cards⁸.

One trap to know about if your plan involves escaping the arrears by remortgaging: most mortgage deals impose an early repayment charge, defined in the FCA Handbook as "a charge levied by the mortgage lender on the customer in the event that the amount of the loan is repaid in full or in part before a date or event specified in the contract"⁹. Repaying your mortgage early, including by moving it, can trigger that charge, so it is a cost to check before assuming a new deal solves the problem. The dedicated page on early repayment charges explains how they work.

Talk to your lender: the options it can offer

The single most important step is to contact your lender before the situation gets worse, not after. Lenders have a range of arrangements they can put in place, and official guidance is that your lender will suggest a way to pay off the arrears gradually, alongside your usual payments¹. Advice agencies describe the same toolkit: your lender may give you the option to pay what you owe in full, or in instalments¹⁰.

The arrangements a lender can consider include:

• Paying what you owe in full, if your difficulty is temporary and you now have the money¹⁰
• Paying the arrears in instalments on top of your normal monthly payment¹
• Adding your arrears to the mortgage balance, so they are spread over the remaining term⁸
• Increasing your repayments to clear the arrears over an agreed period⁸
• Delaying payments of arrears for an agreed time⁸
• Extending the mortgage term to reduce the monthly payment (repayment mortgages only)⁸
• Converting to interest-only for a period to help clear the arrears⁸

Before you make an offer, prepare a budget. Official guidance from Northern Ireland's nidirect service advises getting an adviser's help to prepare a budget of your income and outgoings, to work out whether the mortgage instalment and the arrears can be afforded over a period of time¹¹. The same guidance sets the standard for the offer itself:

An offer you cannot keep is worse than a smaller offer you can, because a broken arrangement removes the lender's reason to hold off. If your lender has not started court action yet they must look at your offer². Free advice agencies can help you build the budget and make the offer, and the section on free debt advice below lists them.

The Mortgage Charter: help from lenders covering around 90% of the market

The Mortgage Charter is a set of commitments that lenders have signed up to, setting the standards they will adopt when helping their regulated residential mortgage borrowers who are worried about higher rates⁴. The lenders who signed up represent approximately 90% of the mortgage market⁴, a figure confirmed by the House of Commons Library¹² and by the FCA's own uptake data, which counted 49 signatories representing around 90% of the mortgage market¹³. So for most borrowers, the Charter is not an optional extra: it is the baseline of what their lender has promised.

The Charter includes help with high interest rates and repayment problems¹⁴. Independent Age summarises the background: due to high interest rates, the government has asked mortgage providers to help customers to afford their mortgage payments¹⁵. The Scottish Government's cost of living guidance makes the same point for Scottish borrowers: if you are having problems with your mortgage you could get help from your lender if they have signed up to the Mortgage Charter¹⁴.

Two Charter commitments matter even if you are not yet in arrears:

• Switching deal early. Customers who are up to date with payments can switch to a new mortgage deal with their lender at the end of their existing fixed-rate agreement without a new affordability check¹². Borrowers coming to the end of a fixed rate can get a new rate up to six months before the old one expires, and can change their mind if rates go down¹⁶.
• Time to revert. Customers who change their mortgage terms, for example by moving to interest-only or extending the term, have the option to revert to their original mortgage deal within six months without affecting their credit score¹².

The Charter's switch commitment applies to 97% of the mortgage market where customers are up to date with payments and not seeking to borrow more or change their repayment type or term⁴. The one-off options for borrowers who are struggling are covered in the next section, and the full detail is on the site's Mortgage Charter page.

Interest-only or a longer term: how the one-off options work

The Charter's headline options for struggling borrowers are one-off changes to the shape of the mortgage. A customer can switch to interest-only payments for six months, or extend the term, and these options can be taken by customers who are up to date with their payments without a new affordability check or affecting their credit score⁴. Advice NI lists the same pair among the standard options for clearing arrears: converting the mortgage to interest-only for a period, and extending the mortgage term⁸.

Both options reduce the monthly payment, but in different ways and with different consequences:

Interest-only needs particular care. With an interest-only mortgage, monthly repayments just cover the interest on the mortgage, and the full loan is payable at the end of the term in one go¹⁷. Independent Age puts it the same way: borrowers just repay the interest, with the full loan payable at the end of the term¹⁵. Used for six months to get through a rough patch, that is manageable; used indefinitely, it stores up the problem, because the debt itself is not shrinking. StepChange is explicit that this is not a long-term solution, and that you only pay the interest and must pay the capital before the end of the term¹⁰.

The safety net is the revert right: a borrower who takes one of these options can go back to their original mortgage deal within six months without affecting their credit score¹². Around 3.7% of borrowers have reduced monthly payments by switching temporarily to interest-only payments or extending loan terms, a share that has been stable since mid-2023 into early 2026¹².

Support for Mortgage Interest is a government loan, not a grant

Support for Mortgage Interest (SMI) is a government loan scheme helping with the interest costs of mortgages and certain home loans¹⁸. It exists for a clear purpose: the SMI policy was introduced to prevent low-income homeowners from losing their homes, through contributions towards mortgage interest payments¹⁹. It is aimed at people receiving means-tested benefits: Universal Credit, the means-tested legacy Department for Work and Pensions benefits it is replacing, and Pension Credit¹⁸.

The critical thing to understand is what kind of help it is. Support for Mortgage Interest is paid as an interest bearing loan. It is secured against the property and recoverable from the homeowner²⁰. Since April 2018, SMI has been delivered as an interest-bearing loan secured against the property, replacing the earlier non-repayable benefit²¹. So the money helps with the monthly payment now, but it becomes a debt against your home that is repaid later.

What it covers is narrow. It can help towards mortgage interest payments for a mortgage, for a loan to buy your home, or for a loan to improve your home²². It cannot help you pay the amount borrowed, insurance policies or mortgage arrears⁵. That last exclusion matters most for anyone reading this page: SMI does not clear arrears, and it does not reduce the capital you owe. It eases the interest burden so that keeping up the ongoing payment becomes possible.

The money normally goes straight to the lender rather than to you: SMI is normally paid direct to the claimant's lender, and paid direct to the claimant only if the lender is not on the Qualifying Lenders Register²⁰. The House of Commons Library confirms that payments are generally made directly to lenders¹⁸.

SMI waiting periods and loan limits

SMI is not available from day one of a benefit claim. The waiting period depends on which benefit you receive:

The 39-week rule is stated in both the nidirect guidance for Northern Ireland⁵ and its equivalent for repaying the loan²⁰, and it applies to any qualifying benefit other than Pension Credit or Universal Credit. For working-age claimants, the House of Commons Library confirms the three-month Universal Credit qualifying period, while Pension Credit claimants can get SMI immediately¹⁸.

There are also rules about backdating. Claimants can choose to backdate their SMI loan to any date they were eligible as long as they have served their qualifying period. A claimant who wants to backdate their SMI loan to before 3 April 2023 will need to have served a 9-month qualifying period, which is 9 assessment periods regardless of earnings, except where a claimant receives a nil award²².

On the loan limits, there is a detail that can help disabled homeowners: a mortgage or loan specifically used for adaptations to a claimant's property, to meet the needs of a disabled person in the household, does not count towards the £200,000 limit²². Against that, the House of Commons Library notes a long-standing criticism of the caps: the loan caps are not routinely reviewed to take account of inflation or increasing house prices, and the last change to the cap was in January 2009²¹. For Northern Ireland borrowers, the Department for Communities states it will not make a profit from SMI loans⁵.

Repayment follows from the loan's nature. SMI loans are repayable with interest when the property is sold, ownership is transferred, when the claimant dies, or on a voluntary basis²¹. You will need to pay this money back, with interest, when you sell or transfer ownership of your property²⁰. And anyone else who inherits your home, such as a partner you do not live with, your child or a friend, will need to repay the loan immediately²². The site's SMI page covers the scheme in more depth.

Free debt advice from StepChange, National Debtline and MoneyHelper

None of the advice you need at this point should cost you anything. The main free services are:

• StepChange, which provides free debt advice online²³ and sets out the options lenders can offer on mortgage arrears¹⁰
• National Debtline, reachable on freephone 0808 808 4000²⁴, with written guides on debt solutions such as debt management plans
• MoneyHelper, a government backed service that can help you find a way forward if you are worried about money and finding it difficult to know where to start⁶

MoneyHelper offers free, impartial money and pension guidance, backed by government, and its helpline is 0800 138 7777⁶. That number has a specific place in the mortgage rules: the FCA requires lenders to give borrowers a MoneyHelper information sheet called "Problems paying your mortgage", which is available on the MoneyHelper website, and copies can also be obtained by calling 0800 138 7777²⁵. MoneyHelper also offers a WhatsApp channel on +44 (0)7701 342744⁶.

A common fear stops people calling: that asking for advice marks your credit file. It does not. What is recorded is what happens to the debts. The Financial Ombudsman Service is clear on the distinction: if you have already missed payments, any help you receive will impact your credit file²⁶. The missed payments are the problem, not the advice. Where a reduced payment arrangement is agreed, the shortfall can become agreed arrears and be recorded on the consumer's credit file²⁷. Some schemes build advice in: under Help to Buy Wales, when an account falls into arrears and the customer is experiencing financial difficulties, the customer will be referred to a source of free and independent debt advice²⁸.

Repossession: at least 12 months from the first missed payment under the Charter

The Charter's strongest protection is about time. A borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment⁴. The House of Commons Library puts it as a minimum 12-month period from the first missed payment before there is a repossession without consent¹², and the Financial Ombudsman Service confirms that lenders who are signed up to the Mortgage Charter have agreed not to repossess until at least 12 months after you first miss payments²⁶.

That guarantee only binds Charter lenders, and "exceptional circumstances" is a qualification worth noting. But even outside the Charter, repossession is not automatic and courts have real power. A court can often stop repossession of your home if you show that you can repay the arrears by the end of the mortgage term². Shelter Cymru lists the defences that can defeat or adjourn a repossession claim, including: you do not agree that you owe as much as the lender says, you have repaid the arrears before the hearing, the court papers are incorrect or incomplete, the lender cannot prove the claim, or you had bad advice when taking out the mortgage or secured loan²⁹. The court may also adjourn where you have an outstanding benefit claim that will clear or significantly reduce the arrears, you are selling your home and the proceeds will clear the arrears, you can arrange to clear them soon, you would have difficulty finding somewhere else to live, or you can prove sufficient funds in the near future²⁹.

Before any court date, contact the lender directly or through an advice worker or your solicitor to make a proposal to pay the mortgage instalments and pay off the arrears within a reasonable time, and let them know if you have put the house up for sale or plan to do so shortly¹¹. When faced with repossession, contact your solicitor or a free advice agency¹¹. The site has separate pages on what a lender must do before going to court, the court process in England and Wales, repossession in Scotland and repossession in Northern Ireland.

Where the Mortgage Charter and SMI do not help

Both main schemes have edges, and it is better to know them in advance.

Buy-to-let is outside the Charter. The Charter's commitments do not apply to buy-to-let mortgages⁴. A landlord in arrears cannot rely on the 12-month repossession guarantee or the one-off interest-only and term options. Buy-to-let arrears are a live issue: there were 8,390 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2026, 6 per cent fewer than in the previous quarter, accounting for 0.44 per cent of all buy-to-let mortgages outstanding³. The site's buy-to-let page covers the market, and talking to the lender early remains worthwhile even without the Charter.

SMI does not touch arrears or capital. It cannot help pay the amount borrowed, insurance policies or mortgage arrears⁵, and its caps have not been updated since January 2009²¹. Someone whose problem is the arrears themselves, rather than the ongoing interest, needs a lender arrangement or debt advice rather than SMI.

Guides are nation-specific. Debt and housing advice differs between the UK's nations. National Debtline's guides state their coverage explicitly: for example, its private tenant rent arrears guide covers Scotland only, and you will need different advice if you live in England and Wales³². The same discipline applies to mortgage repossession: the court process in Scotland is not the same as in England and Wales, so check any guide covers where you live.

The Charter is not a payment holiday. Its options change the shape of payments, they do not cancel them, and the interest-only switch in particular leaves the capital untouched¹⁰.

Avoiding scams and paid 'solutions' when you are behind

People in arrears are a target for firms selling expensive or worthless "solutions", and for outright scammers. The protections here are about knowing what genuine free services look like. MoneyHelper's guidance on scams is emphatic: "We'll never contact you out of the blue or charge anyone for our services"³³. The Money and Pensions Service has never, and will never, turn up to your home or contact you out of the blue via phone, WhatsApp, email or text³³. Anyone claiming to be from MoneyHelper who cold-calls, texts or visits is not who they say they are. If you need to check or report, MoneyHelper's Financial Crimes and Scams Unit can be called on 0800 015 4402³³.

The same principle applies to debt advice generally: StepChange's advice is free²³, National Debtline's is free²⁴, and no genuine statutory scheme asks for an upfront fee to arrange a mortgage payment plan. The site's scams guide covers the wider warning signs.

Two rules from the official guidance also protect you from the most common self-inflicted harm:

• Never make unrealistic arrangements for payment; any proposal should be your best realistic proposal¹¹. A firm that promises to make your arrears "disappear" is inviting you to break exactly this rule.
• If you are ill, out of work or selling the house and you keep to a reduced payment arrangement, your lender should usually waive arrears fees during that time²⁷. That concession depends on you keeping to the arrangement, which is another reason the arrangement must be realistic.

Finally, if a complaint about how your lender has handled your arrears is not resolved, the Financial Ombudsman Service can look at it, including at arrears charges²⁷ and at how lenders treat customers in financial difficulty²⁶.