facebook logogoogle logo
5.0 Rating | 136 - reviews
facebook logogoogle logo
5.0 Rating | 136 - reviews
facebook logogoogle logo
5.0 Rating | 136 - reviews

Missed mortgage instalments in the UK? Act fast!

niespłacone raty kredytu

Need assistance? Leave your details, and we'll get back to you shortly. Request a callback now.

Table of contents
(click to expand)

missed mortgage instalments in uk

You may have noticed that at the end of every article about mortgages that we publish on our blog, the message “Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.” appears. The vast majority of borrowers will never find themselves in such a situation, but accidents do happen and it’s useful to know how to deal with serious problems. In today’s post, we’ll answer the most common questions about delayed instalments, while also looking at the steps you should take if you get into financial trouble.

How to reduce mortgage instalments?

missed mortgage instalments in uk

Let’s start with the least catastrophic scenario. If you’re paying your bank back regularly but feel that one unexpected expense could put you behind on your mortgage instalments, it’s definitely worth looking into ways to reduce them.

There are at least a few ways to reduce the cost of a mortgage, but some of the most popular are:

  • Remortgage, which means changing your current mortgage for another with better terms and conditions;
  • Insurance review, which may result in the selection of a cheaper home insurance policy or more favourable life cover;
  • Overpaying your mortgage, which probably offers the greatest security, although it does require a commitment of additional funds.

We recently prepared a comprehensive article on this topic, so be sure to check out how to pay lower mortgage instalments.

I have a one-off late mortgage payment in the UK. What should I do?

In our experience, many mortgage non-payments are one-offs. Not all borrowers choose to take out income protection, and if they are self-employed or on a zero-hours contract, even a few days’ absence from work can clearly put a strain on their household budget. Due to illness or accident, such people will not be able to pay instalments on time. What should one do in such a situation?

First and foremost – stay calm. Most banks will not start the process of repossessing your property unless your arrears reach three mortgage instalments. This means that unless you get into long-term trouble, you are unlikely to face eviction.

As soon as you find out that you will not be able to pay the instalment by the due date, contact your bank immediately. This institution is staffed by people who don’t want your home to be auctioned off in an instant – it’s a hassle for them too, and by showing a willingness to cooperate, you will definitely make things easier for yourself. However, if you do not contact the bank with the relevant information, the staff of this institution will do this for you, usually within 15 days of the due date.

Once the date specified in the credit agreement has passed, a so-called grace period begins during which no additional late fees are charged. This is usually between 5 and 15 days and you will find this information in your credit agreement. Do everything you can to settle the debt within this period. What can you do to get the money to pay off your mortgage?

What can you do to get money to pay off your mortgage instalments?

  • Ask your employer to pay your salary earlier – this should improve your cash flow;
  • Try to take overtime to make more money in the next few days;
  • Limit your spending as much as possible.

On the other hand, we strongly advise against borrowing money to pay for a mortgage instalment. This is the first step towards a debt loop, which then leads to even bigger financial problems.

I have not been paying my mortgage instalments for a long time and the situation is getting worse.

missed mortgage instalments in uk

What happens in such a situation? Things start to get complicated when you are already behind on your repayments and at the same time your financial situation is getting worse. If you find yourself in this position, you need to act quickly and take all possible steps.

  1. Contact your bank and communicate your concerns about future payments. This is a basic step that will allow you to start negotiating;
  2. Immediately cut back on spending, cancel subscriptions and consider selling unnecessary items. In this way, you will gain some cash;
  3. Try to increase your income by taking overtime at work and asking your boss to pay you early;
  4. Go to a financial adviser, such as Citizens Advice. This form of help is free, while there is a good chance that professional help will be useful in getting your finances in order;
  5. Pay off as many debts as possible, because the smaller the amount of debt you have, the better off you are. If mortgage instalments are not the only debts you are paying, also contact other lenders to defer repayment. Prioritise your mortgage;
  6. Apply for a capital repayment deferment at your bank. Many institutions offer a six-month break from normal mortgage repayment. During this time, you only pay back interest to the bank, which will significantly improve your financial situation. It is also possible to suspend mortgage repayment altogether, although this has a negative impact on your credit score.
  7. Apply for an extension to your mortgage term, which should reduce the instalment of your mortgage. Banks often offer this solution if their customers are struggling with persistent financial problems;
  8. Take advantage of the assistance schemes that are available in some parts of the UK. You can read more about this on the Moneyhelper website;
  9. As a last resort, sell your house. Although this is a very serious decision, in some cases there is no other way to free yourself from financial problems.

For more information on possible solutions, see: Shelter, National Debtline and Moneyhelper.

Do unpaid mortgage instalments affect credit score?

The answer is simple: yes, they do affect. Let’s also add that defaulting on a mortgage is a serious obstacle to receiving a positive credit decision in the future, and traces of such an event will be on your documents for a minimum of 6 years. However, let’s be honest – if you are unable to pay your mortgage on time, you should seriously consider whether continuing to borrow is the right solution.

Mortgage payment holidays in the UK

missed mortgage instalments in uk

Mortgage payment holidays, are a good choice that should definitely be considered in case of temporary financial problems. Although they are not available to every borrower, the opportunity to suspend mortgage repayments altogether for up to a few months is so attractive that it is definitely worth applying for.

Whether you qualify for a mortgage suspension depends on:

  • The policies of the bank where you took out the mortgage;
  • The terms of the mortgage agreement;
  • Your financial situation and prospects for the coming months.

In some banks, taking a mortgage holidays is only possible if you have previously been overpaying it. This is another argument for giving more back to the bank than the original agreement stipulated. However, there are exceptions to this rule – mortgage repayment suspension can be used by people who are going on maternity leave or have been made redundant.

You will not benefit from a mortgage holidays if you already have outstanding mortgage repayments when you apply for them. If this is the case, it’s worth contacting your bank anyway, although you will most likely be left with applying for an extended repayment period.

When is it worth applying for a mortgage payment suspention in the UK?

  • A mortgage holiday will also work if you have not previously had a problem paying your debts;
  • A mortgage holiday will also work well if you have not had a problem with your repayments so far;

It is not worth applying for a mortgage holiday if you do not know whether your income will return to its previous level or if you are certain of this. If mortgage instalments continue to be too high for you after a repayment suspention, you will be left with a problem that you could have solved in time.

To find out more, use the Moneyhelper website.

Summary

We hope you never need the information in this article. Lack of debt control and unpaid mortgage instalments can take a toll on your mental health and directly threaten your family’s financial security. If you feel that you are not coping with your debts, contact specialist advisers as soon as possible. Your future depends on this decision!

Share

Table of contents
(click to expand)

Get In Touch

By submitting the form, you consent to the collection and processing of your personal data in accordance with our privacy policy.
5.0 Rating | 136 - reviews
facebook logogoogle logo

Our team is here to assist you. Contact us by completing the form below.

Think carefully about securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services and some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts
secured on it.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Conveyancing services are not regulated by the Financial Conduct Authority.

Extend Finance nor The Right Mortgage Limited can’t provide advice regarding Personal Pensions, Pension planning or investment planning advice. You must seek independent financial advice from a suitably qualified professional financial adviser who may charge you for advice.

Wills, Will writing, Trusts and Trust planning are not regulated by the Financial Conduct Authority.

* We will receive a small fee from CheckMyFile for any referrals.

Get In Touch

By submitting the form, you consent to the collection and processing of your personal data in accordance with our privacy policy.
5.0 Rating | 136 - reviews
facebook logogoogle logo

Skontaktuj się

Wysyłając formularz wyrażasz zgodę na gromadzenie i przetwarzanie Twoich danych osobowych zgodnie z naszą polityką prywatności.
5.0 Rating | 136 - reviews
facebook logogoogle logo

Done!

One of our advisors will contact you ASAP!

Zrobione!

Jeden z naszych doradców wkrótce się z Tobą skontaktuje!