UKfinance reports say “around 94000 aspiring homeowners are in mortgage arrears.” Moreover, with the Bank of England revising interest rates, mortgage payments may rise between 2025 and 2026. However, closing your eyes towards the pending payments would not help. Instead, you must understand the best ways to pay the dues given the circumstances. It is better to act now than lose your home later. Moreover, a mortgage in arrears may affect your ability to borrow for further life goals and needs.

Thus, the first thing here to consider is your finances. Analyse your current liabilities and monthly payments. How much does it cost you monthly to pay such bills? Can you reduce some to save towards mortgage payments? Additionally, reviewing your finances will help you know the benefits that you may be entitled to.

The blog lists the next steps you can take to manage the mortgage payments. It is ideal for first-time homeowners with mortgages in arrears.

6 Moves to consider Immediately if you can no longer pay the mortgage

The interest rates on the fixed mortgage may increase from 1% to 4% in 2025. It means you may need to pay £100 extra on mortgage payments monthly. This may further prove troublesome if you struggled with mortgage payments earlier. Here are some immediate actions that you can take to manage your mortgage payments:

1) Check mortgage protection insurance

You may consider a mortgage payment insurance cover if you have been made redundant or cannot pay. Most individuals with seasonal pay consider this cover to buy their home. It protects them from sudden financial changes and non-repayment. However, it may not be ideal if you work with a consistent pay. Here is when you can use it for:

• You can consider it if you can work no longer due to sickness or long-term injury
• You struggle to get a job after laying off
• You struggle to get a new job but don’t want to skip mortgage payments

However, the reason behind the non-working phase should be genuine. Alternatively, you may not get or check the mortgage protection insurance.

2) Explore possibilities to switch to interest-only mortgage

If you cannot no longer make full payment, this option may help. Under this, you only need to make interest payments instead of paying it with the principal amount. You can do this until your financial situation improves.

However, you would need to discuss the possibilities with your mortgage provider. You cannot initiate it yourself. The mortgage provider analyses your requirements, and current financial capacity and may agree on the take. It is possible if you have been regular with payments.

Besides, you can stop the principal amount for a short time. You must pay the total amount eventually as the situation improves. 

Most individuals consider this payment arrangement on high-interest loans from a direct lender; respectively. It prevents them from paying a whopping interest later and balancing their finances. Moreover, you can skip high penalties on such costly loans from direct lenders.

3) Extend the mortgage term

Again, it is not ideal for every individual. Instead, you can sort relief on monthly payments for a while if you can pay but not much. Precisely, individuals with a drop in income, new but low income, can consider this. This is because reduced income also affects the other basic expenses and mortgage payments. It involves the possibility of continuing the same payments. Thus, you may consider this if you can pay a specific amount consistently.

Eventually, reducing your monthly instalment amount increases the loan term. It means you pay more interest in total. Improvise your decision and check other possibilities for continuing payments within the current situation. It may mean exploring any additional income sources or utilising the windfall for your use.

4) Get help with mortgage charter

Your mortgage lender may help you with the mortgage charter. According to FCA, if struggling to pay a mortgage but don’t have arrears, you can contact lenders for specific guidance. It would not affect your credit rating.
Around 90% of the mortgage lenders sign up for the charter. It is an ideal option if you cannot decide on the best options to choose for your finances. The mortgage charter support may help you with either of the following supports:

• Halt the loan payments for some time
• Pay interest on the mortgage
• Extend the mortgage term

According to MoneySavingExpert, around 215000 homeowners have used the mortgage charter to get help with the payments.

5) Explore possibilities for a mortgage holiday

It is difficult to get a mortgage payment holiday if you are struggling with payments with low income. However, you must explore the possibilities of getting one. If you get one, you can get a temporary relief from mortgage payments. It helps you halt the [payments for 3-6 months according to your circumstances.

However, halting these payments means paying more interest later. Choose a favourable timeline to stop the payments. Work towards improving financial condition and saving towards the mortgage payments.

6) Seek ways to pay off mortgage arrears

It is the best way to get hold of your payments quickly. Analyse the ways to pay the dues in full. You can do so by checking the possibilities of promotion within an existing job. Alternatively, check multiple part-time jobs and apply. Increasing your total monthly income boosts your savings.

You can use a part of it to settle the mortgage dues. It’s your choice whether you can repay the interest only first. Alternatively, you can consider the basic loan agreement payments.

Check whether you can negotiate a lower payment over what you pay. The mortgage lender may agree if you have been on top of the payments earlier. Explore what you can do to make your take promising. It may mean reducing some small debts from your credit profile. Check whether you can add a guarantor to confirm the payments. It grants the security of the loan repayment, and the person may negotiate to some extent.

These are some tips to consider if struggling with mortgage payments. Now, let’s analyse a few questions that may help you with this issue.

Can you sell your house with mortgage arrears?

Yes, you can sell your house to deal with the mortgage arrears. However, you must think about whether you may benefit from the situation. You may not if:

• You are in negative equity. It means the property is less than you owe to the lender.
• You would have to rent a home with high monthly payments
• You want to go ahead with an insolvency solution or bankruptcy.

Considering selling the home may not be legally possible under bankruptcy. Thus, contact experts and solicitors to learn about your moves and make decisions accordingly. Alternatively, contact the direct lender for loans for bad credit scores. It may help you settle the dues and avoid selling the house to pay the mortgage.

However, the amount you may get depends on your financial potential. Personal loans provide much flexibility even if you are expecting bankruptcy or insolvency near. You don’t pay more than what you can on such loans. A favourable arrangement would help you clear the dues and save your home from seizure.

Bottom line

Tackling a non-repayable mortgage is challenging. However, you must not lose hope on the face of it. Instead, analyse the best actions that may help you seek a favourable solution. For example- halting payments for some time grants the opportunity to save enough. You can explore the best earning possibilities and pay towards the pending mortgage payments. Analyse, research and improvise before making any decision.