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What to do if you are struggling to repay your mortgage/how to make sure you get the best mortgage deal

Journalist: Samantha Downes, Freelance and Pumpkin Pensions

ended 11. March 2023

We've covered this news story on City A.M. So I want to write a piece for readers who want advice/guidance from mortgage brokers and experts https://www.cityam.com/londoners-most-at-risk-of-being-among-the-350000-uk-borrowers-who-will-struggle-to-repay-their-mortgage-regulator-warns/

11 responses from the Newspage community

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Rohit KohliVerified
Director at The Mortgage Stop
Firstly it's important to remember that lenders do not want to repossess your home. It's a last resort. As such, it's really important to speak to them if you think you are going to struggle. They have lots of steps and methods to help. We also say to our clients to speak to us as, depending on their mortgage product, how long left in any lock-in period and other liabilities, there may be options we can look at to help. What is vital is not to ignore the problem, as it could have long-lasting impacts, affecting a person's credit rating. Ignoring it will make it worse. There are also some great charities that can offer help such as StepChange, who offer free debt advice and could also be a good first step if you have multiple debts you are struggling to pay.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
If you’re failing to meet your mortgage commitments because of some catastrophic news like losing your job or an illness that means you cannot work, most lenders will bend over backwards to help if you contact them and ask. They could extend your term, offer a mortgage holiday or put you on interest only. However, if nothing has changed in your personal circumstances and it’s just the rise in interest rates that is causing you difficulties they will be less willing. Affordability checks should have been built in to your application for circumstances just like this. You should still ask your lender for help though, as there might be better rates they can offer or extend your loan term. Better still, speak to an independent mortgage broker who will take the time to understand your situation and tailor their advice to your objectives.
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Justin MoyVerified
Managing Director at EHF Mortgages
Finding the 'best' deal will definitely need the support of an independent mortgage broker. They will be the only adviser that can check both your current lender options and the wider market opportunities for your new mortgage. Going direct to your lender will only give you a narrow choice of options, typically with no advice either, and online comparison sites will show a narrow number of lenders, with data that may be out of date. Lenders pay to feature in these best buy tables, so to ensure you cover all the lenders, engage with a broker immediately. If struggling with your mortgage, speak immediately to your lender. Most have a dedicated team that will listen and help devise a plan for you. One of my clients spoke with Barclays this week about some financial issues, and within 30 minutes they had agreed on a plan to go interest-only.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
If you are having trouble making your mortgage payments, you should contact your lender for assistance in exploring your options in the first instance. However, if have spare bedrooms, you could take advantage of the UK government's rent-a-room scheme. This initiative provides a variety of benefits, including the ability to earn up to £7,500 per annum tax-free by renting out a furnished room, which could help alleviate financial pressure. However, you would need to make sure you meet the eligibility criteria & your lender was on board with this.
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Gaurav ShuklaVerified
Managing Director at Home Me Mortgages
If you’re struggling to make your mortgage payments, then speak to your broker or lender immediately. There are plans that can be put in place to ease payments - but be wary at how this may effect your credit report, if it does.

If your mortgage is due to come to and end soon and need a new product, your mortgage broker will be able to assess affordability and make the monthly payments fit your monthly budget. This could entail increasing your mortgage term or changing your mortgage type to interest only - if you meet criteria. These would help ease the monthly payments but you will pay more interest over the mortgage term. However, once we’re out of this situation and rates come down, your broker can revert the payment time back to repayment and decrease the term. Be sure to speak to a broker for the right advice.
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Graham CoxVerified
Director at Bridging Hub
For anyone struggling to pay their mortgage, speaking to your lender should be the first port of call. Ignoring the problem or hoping a solution will suddenly appear is asking for trouble.

All lenders are required to try and help borrowers running into difficulty. You may be able to move onto interest-only, take a payment holiday or extend the term. The main thing is to confront the problem head-on rather than bury your head in the sand.
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Luke Thompson0
Director at PAB Wealth Management
The biggest thing you can do is to get things in order early if your deal is coming to an end speaking to an adviser six months before your current deal is due to end is the best thing to do.

Managing your budget accordingly will also massively help you. If you think you are going to struggle go through your bank statements mark out any discretionary spending and see how much it comes to a month. Gym memberships, old phone insurance, tv subscriptions could be costing you hundreds of pounds a month. Are you using them? These stealth subscriptions can really catch you out.

This might not necessarily be a magic bullet but if you know what you have coming in and going out every month it should help you to ensure you can manage your finances as well as possible to pay for essentials.
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Gary Bush0
Financial Adviser at MortgageShop.com
At times of financial strain, we have found that bank and building society mortgage account holders are often reluctant to contact their lenders - due to a feeling of not quite understanding how they will be treated or a reluctance to be judged by their lender or volunteer data for the lender's next credit reference agency update.
This is where mortgage holders with a good relationship with an experienced and well-qualified mortgage broker/financial advice firm have the edge - the support that a suitably trained adviser can bring is endless at these times.
Speaking personally we make it known to our clients that regardless of the situation we are there for them through any tricky circumstances they might be suffering from, even to the extent of support in a repossession case with their lender - if they have left it too late.
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Gary BoakesVerified
Director at Verve Financial
The most important thing is to not to bury your head in the sand and ignore the situation. Lenders do not want to repossess your home, it is a last resort and courts will find it hard to repossess if you have a payment plan in place with the lender. So call the lender, if you are worried about what they will say call your broker and we can do the phone call together- remember you are not in this alone.
Interest only, payment holidays, reduced payments, and extending term of years are all options the lenders will discuss with you.
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Amit PatelVerified
Adviser at Trinity Finance
If your financial situation has changed and you are struggling with your mortgage repayments then you should speak to your lender in the first instance, the last thing you should do is panic. They will be willing to help and provide you with options, such as deferring payments, payment holidays, increasing the mortgage term which will reduce the monthly payment and switching to interest only. It should be pointed out that interest will accrue and the overall cost of the mortgage will be more expensive over the mortgage term.

You should review your monthly finances and see where you can make savings such as cutting back on Sky TV, Netflix, Gym memberships that you are not using.

Only as a last resort will a lender wish to reposses your property.
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Mark Stallard0
Director and Advisor at House and Holiday Home Mortgages
For those who are struggling to repay their mortgage -- don't give up.

There's help out there.

First things first. Reach out and ask your mortgage advisor before making any big decisions.

The main point is that lenders don't want to repossess, and are willing to help you find a solution.

Having said that, your current lender or bank might not have the best deal for you... and that's why getting advice from a professional is so important. Remember, lenders do prefer it if you've got a clean credit profile, regular earnings, and a good-sized deposit.

So, once again. Don't give up. Work with an expert to find the right solution for you.