Help from your mortgage lender
If you're struggling with your mortgage payment or arrears, your lender will want to help you. They offer different types of help which is why it's so important to contact them directly as soon as possible. Here are some examples of how they might be able to help.
If you’re on a repayment mortgage you may be able to switch to an interest only mortgage. This will reduce your monthly payment as you’ll only be paying the interest on the mortgage, rather than the interest and the capital. This isn’t a long term solution as this type of mortgage means you only ever repay the interest part of the mortgage. You need to make sure that you can repay the capital (the original amount borrowed) at some point before the end of the term.
Extending the term
Depending on your age and the amount of time left on your mortgage your lender might be able to increase the number of years left on your mortgage. This will reduce your monthly payment helping to make it more affordable. You should consider if you’ll be able to continue repaying the mortgage on an extended term, particularly if this means you’ll still be paying your mortgage after retirement.
Your lender might be able to offer you a payment holiday. This means you’d have a break from paying your mortgage for a few months. You’ll need to catch up with these payments before your mortgage term ends. It’s possible that your lender will still charge interest in this period which means you'll pay back more overall.
Assisted voluntary sale schemes
Your lender may offer an assisted voluntary sale scheme. This means they will give you extra time and help if you decided to sell your property.
Government mortgage help
In some cases you can get government mortgage help to help you with your mortgage payments. This is called Support for Mortgage Interest (SMI) and you can find out more on how the scheme works from Gov.uk.
SMI is normally paid directly to your mortagge lender. The payments will start 13 weeks after you've claimed the benefit. This means if you don't have enough money to pay the first 13 weeks you'll build up mortgage arrears which will need to repaid later.