How to deal with mortgage arrears

If you are struggling to pay your mortgage you need to act quickly. Keeping up with your mortgage payments should be your top financial priority. If you don’t pay your mortgage, you could risk losing your home.

If your lender has already started court action to repossess your home (for example, you have already received letters from the court) see our section on Mortgage repossession.

You can also download our ‘Worried about your mortgage?‘ fact sheet or our booklet ‘How to cope with mortgage arrears‘ for more ideas.

Act quickly

If you fall behind on your mortgage payments, you need to act straight away.

Many lenders charge penalty fees for each missed payment. These will increase the amount that you have to pay back and the longer the problem is left unresolved, the more your debt will grow.

Your lender is likely to offer you more options if you negotiate at an early stage rather than waiting until mortgage arrears become unmanageable.

Negotiate with your lender

If you have difficulty paying your mortgage (or think that you will have, for example because you have lost your job) it’s important to talk to your lender as soon as possible. Don’t be put off because you think your situation is hopeless. There is often a solution. If you haven’t yet decided what to do about the problem, explain to your lender that you are taking action to put things right and are going to get specialist advice about your options.

Most lenders will expect you to come up with your own plans for paying off your mortgage, rather than making suggestions as to what you should do.

You can either email / write to your lender or make an appointment to discuss your situation in person. It would be helpful to:

  • produce a detailed statement of your income, spending and debts – use this online budget planner to help you
  • explain any plans you have to increase your income or reduce your spending
  • explain any changes you would like to make to the mortgage and how the new arrangements will affect the future payments.

Your lender will consider your proposal and decide whether to accept it.

Negotiating with your lender can be complicated, especially if you are not sure what options are available. A specialist adviser can help you to look at all the options and put together a realistic and affordable proposal. Contact Shelter Cymru’s expert debt advisers who can help you.

Help to Stay scheme

If you are having or facing difficulty making mortgage payments, the Help to Stay scheme might be able to provide financial assistance to help you keep your home. Support is provided in the form of an equity loan over a 15 year term, and you won’t need to pay anything towards the loan for the first 5 years.

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

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.

Pay as much as you can

Paying your mortgage should be your priority, even if you are under pressure to pay other debts as well. Losing your home through repossession would only make your debt problems worse, so it’s essential to keep paying as much as you can afford. This will help to stop your mortgage arrears from rising too quickly. It will also show your lender that you are trying to tackle the problem.

Mortgage payment protection insurance

Do you have mortgage protection insurance that would keep up your repayments for a time if you are unable to work because of illness, accident or being made redundant? Some people take this insurance out when they first take out their mortgage and then forget that it exists, as it may be included in your monthly mortgage payments.

If you have this type of insurance (which is different from a mortgage indemnity guarantee or life insurance), check the policy carefully. Many policies will not pay out until a few months after you are unable to work, and then for no longer than a year or two. You may need to make other arrangements to cover anything that is not covered by your insurance.

Work out your options

If you want to stay in your home, you will need to find a way of stopping the arrears from rising while keeping up with your future payments. You also need to pay off any arrears that have built up so far.


  • reducing your outgoings. Can you cut back on non-essential spending? Can you reduce your regular living expenses? (such as food, clothing, entertainment and leisure) Can you reduce your insurance costs? (it may be possible to find cheaper buildings insurance, contents insurance, life insurance and/or payment protection insurance)
  • increasing your income. Can you work more hours or find extra work? Are you eligible for any benefits? Can you rent out a room?
  • negotiating with your lender to reduce your monthly mortgage. If you have a repayment mortgage there might be some options you can speak to your lender about. If you have a flexible mortgage you may be able to decrease your monthly or take a ‘payment holiday’ and pay nothing for a few months.

If none of these options are possible, or you want to leave, you may decide to sell your home voluntarily and move somewhere more affordable. Make sure you get specialist advice before you make any decisions.

Stick to the agreement

It’s very important to stick to any agreement you make with your mortgage lender. If you don’t it will probably be more difficult to negotiate with your lender in future. If you have already negotiated an agreement, but are having problems sticking to it, get debt advice immediately. An adviser may be able to help you to persuade your lender to change what was agreed.

Complaining about your mortgage lender

Mortgage lenders should respond sympathetically if you fall into arrears.

If you’re not satisfied with the way in which they deal with you, or you think that they are applying unfair penalty charges, you may want to make a complaint.

You should first discuss the matter with the lender concerned. They should have their own internal complaints procedure.

If this does not sort out your complaint, you can make a complaint to the Financial Ombudsman Service. The ombudsman’s service is independent and is free. Most complaints are dealt with within six months, it may take longer if your case is complicated.

Find out more from Which? about making a complaint about your mortgage lender.

We are sorry that we cannot provide this information in Welsh, however if you would like to speak to an adviser in Welsh please contact 08000 495 495.

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This page was last updated on: December 7, 2023

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.