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Arrears on a repayment mortgage

If you have arrears on a repayment mortgage, read the options below to stop your arrears from rising and to avoid any action being taken against you.

Take a look at our booklet ‘How to cope with mortgage arrears‘ for more ideas.


If your income is affected by coronavirus and you are worried about paying your mortgage, speak to your lender as soon as possible.

During the pandemic mortgage lenders were offering payment holidays, but the deadline for applying for a holiday has now passed.

If you are finding it difficult to pay your mortgage, even if you have had a payment holiday, your mortgage lender should offer you support. It’s important to discuss the support you need with your lender as soon as possible.

If you cancel your mortgage payment direct debit without telling your mortgage lender, then it will be classed as a missed payment and you could risk having your home repossessed.

When you speak with your lender, give them as much information as possible about your circumstances, so that they can offer you the appropriate support. The support could include:

  • Making a part payment for a short time
  • Extending the length of your mortgage
  • Changing the type of mortgage you have.

Click here to find out what support your lender is giving.

Check if you have insurance that will cover your mortgage payments instead. For example, mortgage payment protection insurance or through your bank account.

Reducing capital repayments

If your difficulties are short-term, your lender may agree to allow you to pay only the interest on your mortgage for a few months. This option is most useful when your mortgage is close to being paid off and your monthly payments are mainly made up of capital. You will have to catch up on the unpaid capital later, so you need a realistic plan for future payments.

Some lenders will refuse to allow you to pay interest only if your mortgage is already in arrears. If this happens, get advice. An adviser may be able to help you negotiate with your lender to reduce (rather than stop) your capital repayments to make them more affordable.

You may also be able to persuade your lender to accept reduced interest payments as well as stopping your capital repayments for a limited period. They will normally only do this if:

  • you are trying to sell your home, or
  • your problems are short term and you’ll be able to meet the full repayments soon.

Extending the mortgage term

You might be able to negotiate with your lender to extend the number of years left on your mortgage (the ‘term’). This will give you a longer period of time to pay back your loan, so your monthly payments will be smaller. The likelihood of your lender agreeing to do this usually depends on:

  • how large your arrears are
  • your age and expected retirement date
  • whether you have a permanent job
  • how much longer your current mortgage has to run (many lenders will not extend a mortgage beyond 25-30 years).

If you decide on this option, you can ask your lender to reduce your mortgage term again when your financial situation improves or interest rates fall.

Adding the arrears to your mortgage

It may be possible to add any arrears you have to the rest of your mortgage (‘capitalise the arrears’). It will mean that you can pay off any payments you have missed over the rest of the mortgage term. You will probably have to make higher monthly payments, unless you are also able to extend the term of your mortgage (see above).

You can normally only add your arrears to the rest of your mortgage when your financial situation improves. Most lenders will usually expect you to meet your regular mortgage repayments for at least six months before they will agree to it.

Breathing space scheme

If you are struggling to pay your mortgage and are in arrears you may eligible for the Breathing Space scheme. This gives you time to get some specialist debt advice without the pressure of formal action being taken against you.

To find out more about the scheme and how to apply, click here.

Getting help and advice

Negotiating with your lender can be complicated.

Contact Shelter Cymru for further advice and help.

Alternatively there are lots of other organisations who might be able to help, such as Citizens Advice or the Money Advice Service. Many have specialist advisers who can help you work out your options and/or negotiate with your lender.

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This page was last updated on: August 11, 2021

Shelter Cymru acknowledges the support of Shelter in allowing us to adapt their content. The information contained on this site is updated and maintained by Shelter Cymru and only gives general guidance on the law in Wales. It should not be regarded or relied upon as a complete or authoritative statement of the law.