If you are behind with your mortgage payments, you may eventually ask whether the arrears can simply be written off.
The short answer is that mortgage arrears are not normally automatically written off just because you are struggling to pay them. Mortgage arrears form part of the debt owed under the mortgage, and the lender can generally expect the borrower to deal with the outstanding amount.
However, that does not mean that there are no options.
Depending on the circumstances, mortgage arrears may potentially be dealt with through an agreed repayment arrangement, capitalisation, a negotiated settlement, a property sale or, in some situations, an insolvency process.
The important point is to understand exactly what type of debt you have and what solution is actually being considered.
What are mortgage arrears?
Mortgage arrears are amounts that have fallen due under a mortgage but have not been paid.
For example, if your normal mortgage payment is £1,000 per month and you miss a payment, you have an unpaid amount. If further payments are missed, the arrears can increase.
Arrears may also arise where you are making reduced payments that do not cover the amount required under the mortgage agreement.
Mortgage arrears are generally treated as a priority debt because the mortgage is secured against the property. If the arrears cannot be dealt with, the lender may eventually consider possession proceedings.
That is why dealing with arrears early can be important.
Does a lender have to write off mortgage arrears?
No.
A borrower generally cannot require a mortgage lender to write off arrears simply because the borrower cannot afford to pay them.
A lender may, however, consider different ways of helping a customer experiencing payment difficulties.
Depending on the circumstances, this can include changing the payment arrangement, extending the mortgage term, temporarily changing the payment structure or considering whether the arrears can be capitalised.
The FCA’s mortgage rules require lenders to deal appropriately with customers experiencing payment difficulties and provide for various forms of forbearance and alternative arrangements.
This means that “not being able to pay the arrears immediately” is different from “having the arrears written off.”
Can a mortgage lender agree to reduce the arrears?
It is possible for a lender and borrower to reach an agreed settlement in some circumstances.
However, this should not be confused with an automatic entitlement to a reduction.
A lender may consider the customer’s circumstances, the amount outstanding, the value of the property, the likelihood of repayment and the costs and risks associated with continuing recovery action.
For example, if a borrower has a realistic proposal that results in the lender receiving an agreed amount within a defined period, the lender may consider whether that proposal is acceptable.
The outcome will depend on the circumstances and the lender’s agreement.
Can mortgage arrears be capitalised instead of written off?
Yes, this is an important distinction.
Capitalisation does not mean that the arrears are written off.
Instead, the arrears are added to the mortgage balance and repaid over the remaining mortgage term.
For example, suppose a borrower has:
- Mortgage balance: £180,000
- Mortgage arrears: £10,000
If the lender agrees to capitalise the arrears, the mortgage balance could become £190,000.
The borrower would then repay the larger balance under the revised mortgage arrangement.
This may make the immediate arrears problem easier to manage, but it can increase the overall amount of interest paid because interest may be charged on the additional amount over time.
The FCA states that firms must not automatically capitalise a payment shortfall where the impact would be material. Its guidance says capitalisation may be appropriate where, among other things, the lender reasonably considers that the customer can afford the resulting payments, other options have been considered and capitalisation is in the customer’s best interests.
Therefore, capitalisation should not be described as a mortgage arrears write-off.
What if the borrower cannot afford the arrears?
If the borrower cannot afford to clear the arrears immediately, the first step is usually to establish what is actually affordable.
This can involve preparing an income-and-expenditure assessment and discussing the position with the lender.
Depending on the circumstances, possible arrangements could include paying the normal monthly mortgage payment plus an additional amount towards the arrears, extending the term or changing the payment structure.
The exact options depend on the mortgage, the lender and the borrower’s circumstances.
A borrower should also consider obtaining independent debt advice where multiple debts are involved.
Can mortgage arrears be written off through an IVA?
This requires particular care.
An Individual Voluntary Arrangement, or IVA, is a formal insolvency procedure in which a debtor agrees a legally binding repayment arrangement with creditors through an insolvency practitioner.
An IVA can result in qualifying debts being written off at the end of the arrangement if the terms are completed.
However, a mortgage secured against a property is different from an ordinary unsecured debt.
A mortgage is secured against the property, and mortgage arrears generally cannot simply be included in an IVA without the lender’s agreement.
This means that someone with mortgage arrears should not assume that entering an IVA will prevent the mortgage lender from taking action concerning the property.
A mortgage shortfall after a property has been sold can be treated differently from the secured mortgage itself.
Anyone considering an IVA should therefore obtain specialist debt and insolvency advice before proceeding.
What happens to mortgage arrears after a property is sold?
Selling the property can sometimes provide a way to deal with mortgage debt.
The mortgage is normally redeemed from the sale proceeds.
If there is enough money to repay the mortgage, arrears and relevant costs, the mortgage debt can be cleared.
But if the property sells for less than the amount owed, a mortgage shortfall can remain.
For example:
Property sale price: £200,000
Mortgage and arrears requiring repayment: £225,000
Potential shortfall: £25,000
The £25,000 does not automatically disappear simply because the property has been sold.
The lender may seek repayment of the shortfall, subject to the applicable circumstances and rules.
This is why homeowners in arrears should establish the likely redemption figure and realistic property value before assuming that a sale will solve the entire problem.
For more information, see our guide:
[What Happens to Mortgage Arrears When You Sell Your Property in the UK?]
https://www.immediatebankclaims.co.uk/2026/08/31/mortgage-arrears-selling-property-uk/
Can a mortgage shortfall be written off?
A mortgage shortfall can be treated differently from an ongoing mortgage secured against a property.
If a property has been sold and the lender is left with an unsecured shortfall, the borrower may have different options for dealing with that remaining debt.
These can potentially include an agreed repayment arrangement, negotiated settlement or, where appropriate, a formal insolvency solution.
For example, an IVA can potentially deal with a mortgage shortfall, whereas the secured mortgage itself generally remains outside the IVA unless the lender agrees otherwise.
Bankruptcy can also have different consequences for mortgage shortfall debt.
Because insolvency can affect the home, other assets, income and future borrowing, it should not be treated as a simple method of getting rid of mortgage arrears.
Professional debt or insolvency advice should be obtained before making that decision.
Can bankruptcy write off mortgage arrears?
Bankruptcy can have significant consequences for mortgage debt, but it does not mean that someone can simply remain in their home without dealing with the mortgage.
The mortgage is secured against the property.
If there is equity in the property, the treatment of that equity can be particularly important in bankruptcy.
A mortgage shortfall following the sale of a property can be treated as an unsecured debt within the bankruptcy process, subject to the applicable rules.
This is very different from saying that bankruptcy automatically removes the mortgage from a property.
Anyone considering bankruptcy while owning a property should obtain specialist advice before taking action.
What if the property has already been repossessed?
If a lender has repossessed and sold the property, the situation may move from an active mortgage secured against the property to a mortgage shortfall.
The lender may then seek payment of the remaining amount.
The fact that the property has been repossessed does not necessarily mean that all mortgage debt has disappeared.
There may also be questions concerning the sale price, the redemption statement, costs, interest and the calculation of the remaining balance.
If you have received a demand for a mortgage shortfall following repossession, it is important to establish exactly how the amount has been calculated.
Can a lender agree a full and final settlement?
In some circumstances, a lender may consider a full and final settlement proposal.
This involves offering an agreed amount in return for the lender accepting that payment as settlement of the relevant debt.
However, there is no general rule requiring a mortgage lender to accept a particular settlement offer.
A borrower considering this route should make sure that any agreement is properly documented and clearly states what debt is being settled.
It is particularly important not to assume that making a reduced payment automatically means the remaining balance has been waived.
If a lender agrees to accept a particular amount in full and final settlement, the terms should be clear before money is paid.
Can mortgage arrears disappear after six years?
There is a common misunderstanding that all mortgage debt automatically disappears after six years.
That is not necessarily correct.
Different limitation rules can apply depending on the nature of the debt, whether it is secured or unsecured, whether court proceedings have been started and what payments or acknowledgements have been made.
Mortgage shortfalls can therefore involve complicated limitation issues.
For example, the position may differ between the principal mortgage debt and interest.
If you are being contacted about an old mortgage shortfall or arrears, particularly following a repossession or sale many years earlier, it is important to obtain appropriate advice rather than assuming that the debt has automatically expired.
Can the lender stop charging interest on mortgage arrears?
A lender may, depending on the circumstances and the arrangement being considered, agree to changes concerning interest or charges.
FCA mortgage rules also contemplate certain forms of forbearance, including arrangements involving changes to interest treatment.
But a borrower should not assume that interest automatically stops simply because the mortgage is in arrears.
The mortgage agreement, lender’s treatment of the account and any subsequent arrangement all matter.
It is worth asking the lender to explain clearly:
- the current mortgage balance;
- the current arrears;
- interest being charged;
- any fees or charges;
- the amount required to bring the account up to date; and
- how a proposed arrangement would affect the total balance.
What if the arrears are caused by a temporary financial problem?
A temporary financial problem does not necessarily mean that the mortgage will become permanently unaffordable.
For example, a borrower may have experienced:
- temporary unemployment;
- a reduction in income;
- unexpected expenditure;
- a temporary business problem;
- separation or relationship breakdown;
- illness or other personal circumstances; or
- a short-term cash-flow problem.
In such circumstances, explaining the underlying cause to the lender and providing realistic financial information may help establish whether a temporary or longer-term arrangement is appropriate.
The sooner the issue is addressed, the more options there may be to consider.
What if the lender refuses a payment arrangement?
A lender does not necessarily have to accept every payment proposal.
However, if a borrower believes the lender has not properly considered their circumstances or has failed to follow the applicable rules, there may be complaint and escalation routes available.
The borrower should keep copies of:
- letters and emails;
- income-and-expenditure information;
- payment proposals;
- payment records;
- lender responses; and
- any court documents.
Good records can become particularly important if possession proceedings are later issued.
You can also read our article:
[Can a Mortgage Lender Refuse to Accept a Payment Arrangement in the UK?]
https://www.immediatebankclaims.co.uk/2026/09/07/mortgage-lender-refuse-payment-arrangement-uk/
Does a mortgage arrears write-off affect your credit file?
Potentially, yes.
The treatment of the debt and the credit history are separate issues.
Even if arrears are dealt with through a payment arrangement, capitalisation, settlement or another solution, the historical missed payments may still appear on a credit report for a period.
A debt being settled does not necessarily mean that the historical payment information is immediately removed.
This is particularly relevant if you are hoping to remortgage or obtain new borrowing.
For more information, see:
[How Long Do Mortgage Arrears Stay on Your Credit File in the UK?]
https://www.immediatebankclaims.co.uk/2026/09/25/how-long-mortgage-arrears-stay-credit-file-uk/
Should you ask your lender to write off your mortgage arrears?
There is nothing wrong with asking the lender what options are available, but the request should be realistic.
Rather than simply asking:
“Will you write off my mortgage arrears?”
it may be more useful to establish the complete position and ask what arrangements are available based on your circumstances.
For example:
- Can the arrears be repaid over time?
- Would capitalisation be considered?
- Can the mortgage term be changed?
- Is there another affordable payment arrangement?
- Would a sale of the property resolve the mortgage?
- If there will be a shortfall, can it be dealt with separately?
- Is there a settlement option?
- What happens if no arrangement can be reached?
The answers will depend on the circumstances.
What should you do if repossession is becoming a concern?
If mortgage arrears have progressed to the point where repossession is being threatened, it is important not to ignore the lender’s correspondence.
The position can become more complicated once possession proceedings are underway.
A borrower may still be able to negotiate with the lender in appropriate circumstances, but court deadlines and documents should be treated seriously.
Our detailed guide explains the general process:
[Mortgage Repossession Process in the UK: What Happens From Start to Finish]
https://www.immediatebankclaims.co.uk/2026/06/26/mortgage-repossession-process-uk-2026/
Is mortgage arrears write-off the same as mortgage debt write-off?
No.
These terms can sometimes be used interchangeably in online discussions, but they can refer to very different situations.
A lender might agree to:
- change the payment arrangement;
- capitalise arrears;
- suspend or alter certain charges;
- accept a settlement;
- accept a property sale;
- pursue a remaining shortfall; or
- in some circumstances, agree not to pursue a particular amount.
An insolvency procedure may also affect certain debts.
These are not all the same thing.
A borrower should establish exactly what debt is being dealt with and what the proposed solution actually achieves.
What should you check before agreeing to any mortgage arrears solution?
Before accepting an arrangement, it is sensible to understand its consequences.
Ask the lender for confirmation of:
- The current mortgage balance.
- The total arrears.
- Any interest and charges.
- The proposed monthly payment.
- Whether the arrangement changes the mortgage term.
- Whether arrears are being capitalised.
- The total amount expected to be repaid.
- How the arrangement will be reported to credit reference agencies.
- What happens if the arrangement is broken.
- Whether any separate shortfall or other debt remains.
If a settlement is proposed, make sure the written agreement clearly explains what amount is being accepted and what happens to the remaining balance.
What if you have mortgage arrears and other debts?
This is where the situation can become particularly complicated.
Someone struggling with mortgage arrears may also have credit cards, personal loans, tax debts, business liabilities or other financial commitments.
A solution that deals with one debt may not solve the overall financial problem.
Mortgage arrears are particularly important because the mortgage is secured against the property.
Before entering an IVA, bankruptcy, debt management plan or another formal arrangement, it is important to understand how that solution affects the mortgage, the property and any equity.
Free debt advice may be appropriate where several debts are involved.
Can mortgage arrears be written off after a property sale?
Possibly, but it depends on what happens after the sale.
If the sale proceeds are enough to redeem the mortgage completely, there may be no remaining mortgage debt.
If there is a shortfall, the remaining debt does not automatically disappear.
The borrower may then need to negotiate repayment or consider whether another debt solution is appropriate.
This is one reason why calculating the likely net proceeds before agreeing to a sale can be important.
Final thoughts
So, can mortgage arrears be written off in the UK?
Sometimes debt can ultimately be reduced, settled or written off, but there is no general rule that mortgage arrears are automatically cancelled because a borrower cannot afford them.
For an active mortgage secured against a property, the more immediate possibilities may involve negotiating an affordable arrangement, considering capitalisation where appropriate, changing the mortgage structure or, where necessary, considering a sale.
If the property is sold and a mortgage shortfall remains, the position can become different because the remaining debt may no longer be secured against the property.
Formal insolvency solutions such as an IVA or bankruptcy can also affect certain debts, but they carry significant consequences and should not be entered into simply on the assumption that they will remove mortgage arrears.
The important thing is to establish exactly what is owed, what is secured against the property, what the lender is proposing, and what would happen if the proposed arrangement fails.
If you are already in mortgage arrears or facing possible repossession, obtaining appropriate professional or independent debt advice early may help you understand the options available in your particular circumstances.
About Immediate Bank Claims
Immediate Bank Claims is a UK-based client service providing independent support, guidance and assistance relating to property repossession, mortgage arrears, LPA receivers, debt matters and related issues.
Disclaimer: Immediate Bank Claims is not a firm of solicitors or barristers; it provides independent support, guidance and assistance relating to property repossession, mortgage arrears, LPA receivers, debt matters and related issues. The content of this article is provided for general information only and does not constitute legal or financial advice. Individual circumstances vary, and appropriate professional advice should be obtained where required.