I cannot afford to pay Mortgage Payments – What Can I Do?

Many are worrying “they can’t pay the mortgage repayments” and are questioning what solutions there are?

Have your finances been affected by Covid-19?

If you find yourself in a stressful situation where you cannot afford to pay your monthly mortgage instalments, then it is crucial you tackle the issue straight away.

Burying your head in the sand won’t help anything and will only make your personal circumstances worse.

There are ways that you can get your finances back on track.

Keep reading our mortgage repayment article to find important information that may help you get out of mortgage arrears.

Contact your mortgage provider

First things first, once you realise you won’t be able to make a payment, or if you have just missed a repayment, you need to contact your mortgage lender right away.

It is crucial that your mortgage provider is aware of your economic standing, to ensure you don’t lose your home.

Mortgage advisors are more than happy to discuss viable options that will allow you to make some form of repayment to your debt.

Mortgage lenders will want to be able to receive their money at some point, even if it’s not straight away.

So, helping you find a reasonable solution will also benefit them in the long run.

What if I’ve already missed a mortgage repayment?

If you have failed to pay one of your mortgage instalments, you are likely to receive a call or letter from your mortgage provider.

Do not ignore their calls or attempts at communication, as this will not help.

Missing mortgage payments can negatively affect your credit rating. Your mortgage lender should provide you with alternate repayment options if you cannot meet your current arrangement.

Always remember that mortgage companies cannot reclaim any of your possessions unless they have offered reasonable solutions first.

Even if you still fail to meet repayments, despite attempting other payment options, mortgage providers have to give you notice before claiming your property as collateral.

If you are concerned you won’t be able to afford your repayments, speak with a mortgage debt help charity straight away.

What are my options?

Once you have accepted the fact that you can’t make your scheduled mortgage bills, then you can focus on finding a solution that works for your unique financial circumstances.

Don’t panic! There is a range of options available, that should help you pay your debts back.

Talk to your mortgage provider

Firstly, it is crucial you contact your mortgage provider as soon as you realise you will struggle to make any repayments.

If your lender isn’t aware of the situation, then they can’t do anything to help you.

They may even:

  • Reduce your monthly instalments
  • Allow you to transfer to a more cost-effective payment plan
  • Grant you a temporary grace period in which you don’t need to make any payments, also known as payment holidays

Mortgage companies are likely to try and help you as they want to get their money back, and in order to get their repayments, they will be lenient with how this happens.

You may also want to speak to an insurance adviser about mortgage payment protection insurance.

Attempt to remortgage your property

Remortgaging your property can be a wise decision if you are deemed eligible.

There are many mortgage companies with a range of offers.

If you are struggling to make payments to one lender, why not search around and see if another lender can provide you with a better deal.

You don’t need to stay with the same company, especially if one provider can provide a deal that will take some financial pressure off your shoulders.

Switch to an interest-only mortgage

An interest-only mortgage is only a viable option for those who are on a repayment mortgage plan.

Typically, mortgage providers are pretty lenient with their customers switching between repayment plans.

This option can be very beneficial, as you will only be making mortgage interest payments, without the capital.

So, your monthly payments can be significantly lower.

Then if you ever find yourself in a better financial circumstance, you can switch back to your full payments.

Extend the period of your mortgage

Many mortgage companies will allow their customers to extend the length of their debt repayments.

For example, if you have 5 years left in your agreement, you may be able to extend this to 10 years.

Subsequently, your monthly payments will be much less.

Please bear in mind that by extending your mortgage timeline, you may end up paying more in interest.

You will need to check your eligibility for this option.

Some factors, such as age, may impact whether your lenders will agree to lengthen your mortgage agreement or not.


If your mortgage lenders can see that your inadequate financial circumstances may only be temporary, they may agree to lower your payments each month.

They may even consider granting you a temporary grace period, by which you don’t need to pay anything at all.

A forbearance is an option for those struggling to pay, however, it can impact your credit rating, so consider all your options.

Loan Modification

It may be possible to lower your instalments each month via a loan modification program.

Loan modification programs help homeowners keep their property, even when they are in a situation where they are failing to make any repayments.

Be wary, as some debt settlement plans attempt to disguise themselves as loan modification programs.

Debt settlement plans can have a negative impact on your credit record.

Always check with a free debt charity before entering any new agreements.

Debt Settlement

Through a debt settlement plan, creditors agree to accept less than the full amount initially agreed upon.

The main problem with this kind of plan is that it has a detrimental impact on your credit rating.

Having a poor credit score will make other financial processes, such as taking out another loan, much harder.

So, before agreeing on a debt settlement plan, you should consider other options.

Rent out a room

One idea that will help you meet your monthly repayments is to bring in a lodger.

Hiring out a room will help you split your bills in half, as the mortgage payments will be shared.

Some people may be uncomfortable with the idea of a stranger moving into their home, but there are many benefits.

For example, having an extra individual live with you can help you cover other essential bills, other than your mortgage.

Your lodger also doesn’t have to be a stranger, you can choose to live with a friend or family member.

Rent out your property

If renting out your room isn’t enough, then you could even consider renting out your whole property.

You could rent out your property at a rate that will cover your mortgage repayments, then move into a smaller, cheaper property for the time being.

Moving into a rental property that is more within your means, will allow you to make your payments much easier.

This option is beneficial as you get to keep your property while managing to get back to a financially stable position.

Sell to rent

If you know you can’t make your repayments but want to stay in control, you could sell your property and rent instead.

You may lose money throughout the sales process, but you will come out with a large sum of money at the end, which could make your finances more manageable.

With the money from your house sale, you will be able to make your rental payments each month, without any stress.

It may be a daunting thought that you have to sell your home, but if it will ease your money worries, it may be worthwhile.

Downsize your property

You may be living in a home that is way larger than it needs to be.

Say you are a family of 4, where you only need 3 bedrooms, but you have 5 bedrooms.

The additional cost tied to having the luxury of extra space could be pushing you down the rabbit hole into unnecessary debt.

If this is the case, you could consider downsizing.

By selling your larger property and moving into a smaller property, you can cover a lot of the mortgage in a downpayment.

Relocate to an area with lower house prices

House prices vary across the country, with some areas having similar sized property at twice the price of that in another location.

This doesn’t necessarily mean you have to move to another city miles away.

You can see drastic changes in house prices within a town, based on many factors, such as proximity to schools, town centres or transport.

So, it is worth having a look around to see if there are any cheaper properties nearby.

You could even find a larger property than you are currently in, at a much lower cost.

Deed in Lieu of Foreclosure

With this kind of mortgage agreement, your creditor agrees to clear your mortgage payments in exchange for the deed to your property.

Many homeowners opt for this method over a foreclosure, as a deed in lieu only stays on your credit report for 4 years.

Whereas a foreclosure statement will linger on your credit file for up to 7 years.

Are there any government schemes that can help?

There is a range of government schemes available to help those who are seriously struggling to meet their mortgage bills.

The Support for Mortgage Interest scheme (SMI) offers mortgage help to individuals who are on certain benefits, such as:

  • Income Support Schemes
  • Pension Credit Schemes
  • Income-based Jobseekers Allowance Schemes
  • Income-based Employment and Support Allowance Schemes

The SMI scheme can help cover any interest rates tied to your mortgage.

With this scheme, the government will send payments to your lender for any interest you may have to pay on top of your capital.

You would need to check your eligibility with the pension service or Jobcentre first.

If you cant pay your mortgage, it’s always wise to explore what mortgage payment options are available for you.

Is the Mortgage Rescue Scheme still available?

The government introduced an arrangement called the Mortgage Rescue Scheme for those who were struggling to meet their monthly property bills.

In England

The Mortgage Rescue Scheme is no longer available in England.

In Wales

If you are based in Wales, you can access the MRS from certain local authorities or housing associations.

The aim of the scheme is to help struggling property owners avoid having their homes repossessed.

In Scotland

Scotland doesn’t offer the MRS, however, they offer a similar scheme called the Home Owner’s Support Fund.

The HOSF helps individuals who can’t afford to repay their mortgage debts.

There are two branches of this scheme, the Mortgage to Rent Scheme and the Mortgage to Shared Equity Scheme.

The Mortgage to Rent Scheme involves a social landlord purchasing your property from you and then renting it back out to you.

The Mortgage to Shared Equity Scheme involves the government purchasing up to a 30% stake in your property, which reduces your mortgage costs.

With the MSES you are allowed to continue residing in your home while making the reduced mortgage repayments.

Get free debt advice

Contact a debt help charity as soon as you realise you are going to struggle to pay your mortgage.

If you realise you won’t be able to meet your current mortgage payment schedule, then debt charities can help you find suitable mortgage support options.

Debt charities can help you save money, negotiate payment holidays and find a suitable plan for reduced payments.

Don’t be afraid to ask for free advice if you are facing financial hardship.

There are many ways to get out of debt, so talk to your lender and talk to a debt charity if you are struggling financially.

Draw up a realistic budget

It is advisable to evaluate your finances frequently, to make sure you are fully aware of what you can and can’t afford.

If you can draw up a realistic budget, this can help you keep your finances in order.

You can start budgeting by reviewing all your bank statements, and looking at your incoming and outgoing expenditures.

This method will allow you to identify areas of your spending that could perhaps be reigned in.

For example, if you are getting 10 takeaways each month, this adds up. Reducing the amount you eat out could allow some extra cash to be funnelled into your mortgage repayments.

Prioritise your bills

If you don’t have any other debts to pay, other than your monthly mortgage payments, then you can focus all of your spare cash on your mortgage bills.

If you have other concerning debts, you may still want to prioritise your mortgage debts, to ensure your home doesn’t get repossessed.

Make sure the most urgent and important bills are seen first.

Continue to repayments

You should always aim to meet your minimum monthly mortgage payments.

If you are struggling financially and don’t think you can pay your debts, contact your lender.

This will let your creditor see that you have good intentions of repaying their loans, as you have made reasonable attempts to make them aware of your struggles.

Struggling With Other Debts

Here are some other debt guides if you are struggling with different types of debts: