Introduction
Falling behind with mortgage payments can quickly create anxiety. Once arrears have started to build, many borrowers assume that the situation has already gone too far and that there is little they can do to recover. In reality, mortgage arrears can sometimes be brought back under control, but the appropriate approach depends on the borrower’s financial circumstances, the amount outstanding and the position reached with the lender.
For someone who has recently experienced a temporary financial setback, catching up may simply mean returning to the normal monthly payment and gradually dealing with the amount that remains outstanding. For someone who has experienced a longer-term reduction in income, however, simply finding enough money to make the next payment may not solve the underlying problem.
This distinction matters. The objective should not merely be to make one payment and then fall behind again the following month. A sustainable solution needs to take account of both the ongoing mortgage payment and the existing arrears.
Current guidance encourages borrowers who are struggling to engage with their lender rather than allowing the situation to deteriorate. MoneyHelper states that lenders must treat customers fairly and consider requests to change how mortgage payments are made, while FCA guidance requires firms dealing with customers in or approaching arrears to exercise forbearance and due consideration.
What Does It Mean to Catch Up on Mortgage Arrears?
When a mortgage payment is missed or only partly paid, an amount remains outstanding. Catching up generally means addressing that outstanding amount while also maintaining the contractual mortgage payments going forward.
Suppose a borrower normally pays £1,200 each month but has missed two payments. There may now be £2,400 of missed contractual payments, subject to the precise circumstances and any applicable charges. Simply paying the next £1,200 does not necessarily clear the arrears. The borrower may need to discuss how the outstanding amount can be dealt with while continuing to meet future payments.
The important question is therefore not simply, “Can I pay something?” It is whether the proposed payments are realistic and sustainable.
A repayment proposal that looks affordable for one month but leaves the borrower unable to meet essential household expenses may not provide a lasting solution. Equally, a borrower whose income has recovered may be able to make a larger payment towards the arrears and restore the account more quickly.
Can Mortgage Arrears Be Repaid Gradually?
In some circumstances, borrowers may be able to agree an arrangement with their lender to address arrears over time. The precise arrangement will depend on the lender and the borrower’s circumstances.
MoneyHelper advises borrowers to discuss alternative arrangements with their lender if mortgage payments are becoming unmanageable. Potential options can include changing the mortgage term, temporarily making lower payments or considering other arrangements depending on the circumstances.
This does not mean that every borrower will automatically be offered a particular arrangement. Nor does it mean that a lender must accept whatever repayment proposal a borrower puts forward. The important point is that borrowers should engage with the lender and discuss what they can realistically afford.
For some borrowers, the ability to make the normal monthly payment plus a manageable additional amount towards arrears may provide a route back towards a regular account. For others, a different arrangement may need to be considered because the underlying monthly payment itself has become unaffordable.
What If You Can Afford the Normal Mortgage Payment but Not the Arrears?
This is a situation many borrowers find confusing.
A person may have regained enough income to afford their ordinary mortgage payment but still be unable to clear several months of accumulated arrears in one lump sum.
That does not necessarily mean that the borrower should stop making the normal payment. Continuing to meet the ongoing contractual obligation, where affordable, can be an important part of stabilising the account.
The outstanding arrears may then need to be discussed separately with the lender. Depending on the circumstances, the borrower may be able to explore whether the arrears can be repaid over an agreed period rather than requiring an immediate lump-sum payment.
The precise outcome will depend on the lender’s assessment and the borrower’s circumstances. This is why it is important not to assume that there is a universal repayment formula for mortgage arrears.
Why Affordability Matters
One of the most important considerations when dealing with arrears is whether any proposed repayment arrangement is actually affordable.
A borrower might be able to find additional money temporarily by cutting spending, using savings or receiving help from family. But if the arrangement requires payments that cannot realistically be maintained for several months, the borrower may simply fall back into arrears.
A more useful approach is to understand the household’s actual financial position. Income, essential expenditure, other priority debts and existing financial commitments can all affect how much is realistically available towards the mortgage.
MoneyHelper recommends preparing a budget before speaking to the lender because it can help borrowers understand what they can genuinely afford to pay.
This is particularly important where the borrower is proposing an arrangement to clear arrears over time. A realistic proposal supported by a clear understanding of income and expenditure is generally more useful than promising an amount that cannot be sustained.
What If Your Financial Circumstances Have Improved?
Not every case of mortgage arrears is caused by a permanent financial problem.
A borrower may have experienced redundancy, a temporary reduction in income, a period of self-employment difficulty or an unexpected household expense. If income subsequently improves, the borrower may be in a stronger position to address the arrears.
For example, imagine a homeowner who missed three payments after losing employment but has since returned to work. Their current income may once again be sufficient to cover the normal mortgage payment, but the three missed payments remain outstanding.
The appropriate conversation with the lender is likely to be different from the conversation that would have taken place while the borrower was unemployed. The borrower can explain the change in circumstances and discuss how the arrears might now be dealt with alongside the regular mortgage payments.
The key is to communicate the change rather than assuming that the lender will automatically know that the financial position has improved.
What If You Still Cannot Afford the Mortgage?
This is where the situation becomes more serious.
If the borrower remains unable to afford the ordinary mortgage payment, simply trying to clear the historic arrears may not solve the problem. There is a risk that the borrower could make a payment towards the arrears but then immediately fall behind again on the next monthly instalment.
In these circumstances, the focus may need to shift towards understanding whether the mortgage itself remains affordable and what alternative arrangements might be available.
MoneyHelper advises borrowers who are struggling to contact their lender as soon as possible, because there may be more options available before the situation deteriorates further.
Borrowers should also consider obtaining independent debt advice where appropriate, particularly if mortgage difficulties form part of wider financial problems.
Can a Payment Arrangement Help Clear Mortgage Arrears?
A payment arrangement can potentially provide a structured way of dealing with arrears where the lender considers the proposal appropriate.
The important word is sustainable.
The borrower needs to understand what they are agreeing to and whether they can realistically maintain the payments. The lender may consider the borrower’s financial circumstances when assessing what arrangement, if any, is appropriate.
Current FCA guidance specifically states that firms must treat customers in or approaching arrears with forbearance and due consideration. The FCA also provides guidance on occasional missed payments and repayment within the original term in appropriate circumstances.
This does not create an automatic right to a particular payment arrangement. It does, however, reinforce the importance of fair treatment and proper consideration when a customer is experiencing payment difficulties.
What Happens If the Lender Does Not Accept Your Proposal?
A borrower should not assume that a rejected proposal means that there are no further options.
The first step is to understand why the proposal was not accepted. It may be that the proposed payment was considered unaffordable, that the period requested was unsuitable, or that the lender needs additional information about the borrower’s circumstances.
Where appropriate, the borrower may need to provide updated income and expenditure information and discuss whether another arrangement could be considered.
If the situation cannot be resolved and the arrears continue, the consequences can become more serious. FCA guidance states that lenders should not start repossession action unless reasonable attempts to resolve the position have failed.
That is why early engagement remains important even when the first proposal does not produce the desired result.
Does Paying the Arrears Automatically Stop Repossession?
Not necessarily, and this is an important distinction.
If legal or possession proceedings have already begun, borrowers should not assume that making a payment automatically brings those proceedings to an end.
The position will depend on the circumstances and the stage reached in the process. Anyone who has received formal possession or court documentation should take the matter seriously and obtain appropriate advice rather than assuming that making a partial payment resolves everything.
Where court proceedings are involved, attending the hearing is particularly important. MoneyHelper notes that borrowers facing possession proceedings in England and Wales can receive free legal advice and representation through the Housing Loss Prevention Advice Service.
A Practical Example
Consider a homeowner who has always maintained their mortgage but loses their job unexpectedly. They miss two monthly payments while searching for new employment.
After finding a new job, their income is sufficient to cover the ordinary mortgage payment again, but they cannot immediately pay the two missed instalments.
Rather than ignoring the lender’s communications, the borrower explains the change in circumstances, provides information about their current income and discusses how the outstanding arrears might be repaid.
The important point is not that a particular outcome is guaranteed. It is that the borrower has moved from simply having an unpaid balance to actively addressing the problem.
Now consider a different borrower whose income has fallen permanently and who cannot afford either the normal monthly payment or a realistic additional amount towards the arrears. In that situation, simply promising to “catch up” may not be enough. The underlying affordability problem needs to be addressed.
These two examples demonstrate why mortgage arrears cannot be treated as a one-size-fits-all problem.
Common Mistakes Borrowers Should Avoid
One of the biggest mistakes is waiting until the arrears become substantial before contacting the lender. MoneyHelper’s current guidance is clear that borrowers should act as soon as they are concerned about maintaining their mortgage payments.
Another mistake is agreeing to payments that are not sustainable simply because the borrower wants to demonstrate that they are trying to resolve the situation. A repayment plan that cannot be maintained can result in further missed payments.
Borrowers should also be cautious about taking additional high-cost borrowing simply to cover mortgage arrears without understanding whether that will improve or worsen their overall financial position.
Most importantly, correspondence from the lender should not be ignored. If formal possession proceedings have begun, failing to respond or attend court can significantly weaken the borrower’s opportunity to explain their circumstances.
What If You Are a Buy-to-Let Landlord?
Landlords can face a different set of financial pressures when mortgage payments fall behind.
A rental property may experience a prolonged void, unexpected maintenance costs, tenant arrears or a sudden increase in other property expenses. Even where the underlying property remains valuable, the landlord may temporarily lack sufficient cash flow to meet the mortgage.
The same basic principle applies: the value of the property does not automatically solve a monthly cash-flow problem.
A landlord facing mortgage arrears should understand the position of the mortgage, the rental income, other property liabilities and the realistic prospects for restoring positive cash flow. Where appropriate, early communication with the lender can help establish what options may be available.
What Should You Do If You Are Already in Arrears?
The most useful first step is to establish exactly where the mortgage account stands. Understand how much is outstanding, which payments have been missed and whether any charges have been added.
Next, establish what you can realistically afford. This should be based on your actual income and essential expenditure rather than an optimistic estimate.
You should then communicate with the lender and explain the circumstances. If the problem is temporary, explain why. If your financial position has changed permanently, be open about that too.
If you are already facing formal possession action, the situation requires greater urgency. In England and Wales, the Housing Loss Prevention Advice Service provides free legal advice and representation from the point a person receives written notice from a creditor seeking possession of their home.
Conclusion
Mortgage arrears do not necessarily mean that a borrower has reached the end of the road. In many cases, the position can be addressed through a combination of restored income, continued monthly payments and an appropriate approach to the outstanding arrears.
However, there is no universal method for catching up. What is affordable for one borrower may be impossible for another, and the appropriate solution can depend heavily on the borrower’s circumstances and how far the arrears have progressed.
The most important lesson is to avoid treating arrears as something that will disappear by itself. Understanding the balance, preparing a realistic picture of affordability and communicating with the lender can help create a clearer path forward.
If you are reading this after missing a mortgage payment, our guide What Happens If You Miss a Mortgage Payment in the UK? explains the earlier stages of the process. If arrears have already developed, our guide What Is Mortgage Arrears? provides further background, while How Many Mortgage Payments Can You Miss Before Repossession in the UK? explains why there is no simple fixed number of missed payments that automatically results in repossession.
Disclaimer
Immediate Bank Claims is not a firm of solicitors or barristers. We provide independent support, guidance and assistance in matters relating to property repossession, mortgage arrears, LPA Receivers, debt matters and related issues. This article is provided for general information only and should not be treated as legal or financial advice. Individual circumstances vary, and appropriate professional advice should be obtained where necessary.