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Redundancy and debt

Redundancy and mortgage payments

Dealing with your mortgage should be a priority if you’re facing redundancy. Failure to keep up with your payments can result in your home being repossessed, so it’s important to act quickly to stop your situation getting worse.

If you have a mortgage payment protection insurance policy, make a claim as soon as possible.

If you don’t have insurance and think you may struggle to afford your mortgage payments, your lender will be able to talk through your options.


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Contact your mortgage lender

Getting in touch with your lender can be daunting, but it’s important that you do so as soon as possible. The earlier you contact them, the sooner they’ll be able to help you.

Remember, they deal with these issues every day and want to support you. They should help by coming to an agreement that you’re both comfortable with.

Once they know your situation has changed, they’ll talk through the options available to you. These could include:


Each of these options allows you to reduce your monthly payment, taking some of the pressure off you while you’re living on a reduced income.

Government mortgage help: Support for Mortgage Interest (SMI)

If you’re a homeowner and get certain benefits, such as Jobseeker’s Allowance, you may be able to apply for Support for Mortgage Interest (SMI) payments.

SMI is paid as a loan and must be paid back with interest if you sell your property or transfer ownership to someone else.

It’s not intended to pay back arrears on your mortgage, but to help towards interest payments while you’re out of work.

SMI may be an option for you if:

  • You’ve been unemployed for more than 39 weeks
  • Your mortgage is less than £200,000
  • You’re claiming Income Support, income-based Jobseekers Allowance (JSA), income-related Employment and Support Allowance (ESA), Universal Credit, or Pension Credit

Find out more about SMI and if you're eligible for government mortgage help.


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Council Tax Reduction

If you’re on a low income due to redundancy, you may be able to get help paying your council tax. This is called Council Tax Reduction (CTR).

The rules around who is eligible for CTR vary depending where you live, as each local authority has its own scheme. You need to contact your local council directly to find out if they can help you.

However, a few general rules apply:

  • You must live in the property
  • You must be the person responsible for paying the council tax

Apply for Council Tax Reduction.

Mortgage arrears and redundancy

If you’re already behind on mortgage payments, you must contact your lender as soon as possible. If you don’t get in touch with them, they may apply to the county court for possession of your home.

It can be tempting to ignore the problem but the sooner you contact your lender, the sooner they’ll be able to help you and stop your situation getting worse.

We’re also here to help you if you’re worried about falling behind on your mortgage payments. Use our free debt advice tool for help and support with your finances.

Find out more about dealing with mortgage arrears.

Should I pay off my mortgage with redundancy money?

If you’ve received redundancy pay, we recommend you use it to pay for essential household bills only. This is because you don’t know how long it may take to find a new job.

Focus on keeping up with your monthly payments until your financial situation improves.

Money worries?

Find out how we can help you.

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