What are mortgage arrears, and what should you do first?
Mortgage arrears are missed payments on your existing home loan. You are in arrears from the moment a monthly payment is not made in full, and the arrears balance is the total you have fallen behind by, separate from the loan itself. Falling behind on a mortgage feels frightening, but it is also common, manageable in most cases, and it very rarely ends in the loss of a home.
The single most important step is to contact your lender early. Lenders are required to work with borrowers in difficulty, repossession is treated as a genuine last resort, and the borrowers who fare worst are usually those who stop opening letters rather than those who owe the most.
Free, impartial debt help exists and is worth using before you agree to anything. We are an information website rather than a broker, lender or debt adviser, so alongside everything in this guide we would point anyone in arrears towards the free services below.
- StepChange Debt Charity, which provides free debt advice and can help you prepare a budget to show your lender
- MoneyHelper, the government backed money guidance service, which publishes dedicated mortgage arrears guidance
- Citizens Advice, which can advise on arrears, court proceedings and any benefits you may be missing
- National Debtline, which offers free telephone and online debt advice
What must your lender do when you fall into arrears?
Mortgage lenders in the UK are regulated by the Financial Conduct Authority, and the FCA rules on arrears handling sit in its Mortgages and Home Finance Conduct of Business sourcebook, known as MCOB. Those rules require lenders to treat customers in payment difficulty fairly, and they shape every conversation you will have.
In practice this means your lender must make reasonable efforts to agree a way forward with you, must consider any reasonable request to change how or when you pay, and must not put unfair pressure on you. Repossession is only permitted where all other reasonable attempts to resolve the position have failed.
Your lender must also keep you properly informed. Expect a formal arrears statement showing the missed payments and any charges, a clear record of what is due, and signposting to free debt advice. Arrears charges must reflect the lender’s actual costs rather than operating as a penalty.
What options can your lender offer to deal with arrears?
Forbearance is the umbrella term for the ways a lender can flex your mortgage while you recover. The right option depends on whether your difficulty is temporary or longer term, which is exactly what the lender will explore with you, usually starting from an income and expenditure budget.
The options form a ladder, from light touch to more significant changes. None of them are automatic, and each has consequences worth understanding, because anything that reduces payments now generally increases the total cost over the life of the loan.
- An affordable arrangement to pay, where you pay your normal monthly amount plus an agreed extra until the arrears clear
- A temporary payment reduction or deferral while a short term problem, such as a gap between jobs, resolves
- Extending the mortgage term, which lowers the monthly payment but increases the total interest paid
- A temporary switch to interest only payments, with a plan for returning to full repayment
- Capitalising the arrears, where the arrears are added to the loan balance and the account is brought up to date
- Support for Mortgage Interest, a repayable government loan covering interest on up to £200,000 of mortgage borrowing for those on qualifying benefits
- An assisted voluntary sale, where the lender supports you selling the property yourself rather than facing repossession
How do mortgage arrears appear on your credit file, and for how long?
Your mortgage account reports to the credit reference agencies every month, and each month carries a payment status. A status of 0 means the account is up to date, while statuses 1 to 6 record how many months of arrears the account has reached, so a marker of 3 means the account is three months behind.
Each monthly marker remains visible for six years from the date it was reported. There is no single deletion date for the arrears as a whole; the trail of markers ages off month by month, which is why a long spell of arrears affects your file for longer than a brief one.
Mortgage arrears are weighed more heavily than almost any other marker because they sit on the exact product being applied for. A lender considering your application cares more about how your last mortgage was paid than about an old mobile phone account, and most application forms ask directly whether you have ever been in arrears on a mortgage.
Can you remortgage with current or historic arrears?
Remortgaging with arrears is possible, but the position differs sharply depending on whether the arrears are live or historic. A new lender is being asked to take on a borrower who is currently behind on the exact type of credit being applied for, and very few will do so.
If you are currently in arrears, the realistic route is usually a product transfer with your existing lender, which typically involves no new credit assessment, or clearing the arrears before approaching the wider market. Historic arrears are a different matter, and specialist lenders publish criteria stating how many missed mortgage payments they accept and how long ago.
Most criteria look at the worst status reached and at recency, for example no more than one missed mortgage payment in the last twelve months. As with other adverse credit, time and clean conduct steadily reopen the market.
| Arrears position | Typical stance of new lenders |
|---|---|
| Currently in arrears | Very limited; a product transfer with your current lender is usually the realistic option |
| Cleared within the last 12 months | Specialist lenders only; expect larger equity requirements and a full explanation |
| Cleared 1 to 2 years ago | More specialist choice; isolated short spells increasingly tolerated |
| Cleared 2 to 3 years ago | Some building societies consider through manual underwriting |
| Cleared over 3 years ago | Often treated as historic where conduct since is clean |
| Markers older than 6 years | No longer visible on your credit file |
When do mortgage arrears lead to repossession proceedings?
Repossession is the end of a long road, not the start of one. Before a lender can seek possession in England and Wales it must follow the pre-action protocol, which requires it to have discussed the reasons for the arrears, considered forbearance and given you proper notice, and a court will expect evidence of all of that.
There is no fixed legal trigger, but in practice lenders rarely start proceedings before around three or more months of arrears, and only once attempts to agree a way forward have failed. Even after proceedings begin you can still negotiate, and courts commonly adjourn or suspend possession where a realistic repayment offer is on the table.
If your situation has moved past arrears into possession, the picture changes, and we cover what comes next, including future borrowing, in our separate guide to getting a mortgage after repossession. Getting advice early from the free services above keeps the most options open, including at court itself, where free duty advisers are often available on the day of a hearing.
Common questions
How long can you be in mortgage arrears before serious action?
There is no fixed limit, but lenders typically escalate as arrears pass two to three months, and repossession proceedings generally only begin after around three or more months of arrears where no arrangement has been reached. The earlier you engage with your lender, the longer the realistic runway becomes.
How do you get out of mortgage arrears?
Start with an honest budget, then contact your lender and propose an affordable arrangement, usually your normal payment plus an agreed extra amount. Term extensions, capitalising the arrears or Support for Mortgage Interest can also help. Free advisers at StepChange, MoneyHelper, Citizens Advice or National Debtline can prepare and negotiate this with you.
Can you get a new mortgage while in arrears on your current one?
Rarely. Almost all new lenders decline applicants with live mortgage arrears, so the practical routes are a product transfer with your current lender or clearing the arrears first. Once arrears are historic rather than live, specialist lenders consider applications based on how many payments were missed and how long ago.
What happens if your mortgage payment goes through two days late?
A payment that arrives a few days late but within the same month is usually still recorded as paid and never reaches your credit file, although the lender may contact you. Problems start when a payment remains unpaid into the following month, at which point a missed payment marker can be reported.
Can you sell your house if you have mortgage arrears?
Yes. The arrears, the mortgage balance and any fees are repaid from the sale proceeds at completion. Tell your lender you are selling, since most will hold further action while a genuine sale progresses, and some operate assisted voluntary sale schemes that support you through the process.
Is there government help with mortgage arrears?
Support for Mortgage Interest is a repayable government loan that covers interest on up to £200,000 of mortgage borrowing for people on qualifying benefits such as Universal Credit or Pension Credit. It does not repay the capital or the arrears themselves, but it can stop the position worsening while you recover.
Information Only - Not Financial Advice
This website provides guidance only. Always consult an FCA-regulated mortgage advisor before making decisions.