What Is a Mortgage Arrears Statement?

If you have missed mortgage payments, your lender may send you a statement showing your arrears and the amount outstanding on your mortgage account. This document is important because it helps you understand how the shortfall has developed and what you may need to pay to bring the account up to date.

However, mortgage statements can contain several different figures, and it is important not to confuse them. The amount of mortgage arrears is not necessarily the same as the total mortgage balance. Interest, charges, payments received and the timing of transactions can also affect the figures shown.

For borrowers experiencing financial difficulties, understanding the statement can help them prepare a realistic repayment proposal, identify possible errors and ask the lender for clarification before the situation becomes more difficult.

If your mortgage is a regulated residential mortgage contract covered by the relevant FCA rules, your lender must provide specified information about your arrears and regular written statements while the account remains in arrears. The precise requirements can differ for other types of borrowing.

What Should a Mortgage Arrears Statement Include?

The Financial Conduct Authority’s Mortgage Conduct of Business rules set out specific information that lenders must provide to customers in arrears on regulated mortgage contracts.

Under FCA rule MCOB 13.4.1, a lender must generally provide the required initial arrears information as soon as possible and within 15 business days of becoming aware that the account is in arrears. This information must be provided in a durable medium, such as a letter or another form that the customer can retain.

The required information includes the missed or partly paid instalments, the total payment shortfall, charges incurred because of the shortfall, the total outstanding debt excluding charges that may be added on redemption, and an indication of the nature and, where possible, the level of charges likely to arise if the arrears are not cleared.

The lender must also provide the relevant MoneyHelper information sheet, currently titled “Problems paying your mortgage”.

You can check the requirements in the FCA Handbook: MCOB 13.4 — Arrears Information.

Let’s look at what these figures mean in practice.

1. A List of Missed or Partly Paid Mortgage Payments

The statement should identify the instalments that have been missed or only partly paid.

For example, if your monthly mortgage payment is £900 and you missed two instalments, the original shortfall from those payments would be £1,800, before taking account of any payments subsequently received, interest or applicable charges.

If you made a partial payment during that period, the remaining shortfall should reflect the amount still unpaid rather than automatically treating the whole instalment as outstanding.

Check the dates and amounts against your bank statements and payment records. If you believe a payment has not been credited, ask the lender to investigate and provide a transaction breakdown.

A payment made shortly before a statement was produced might not appear in the same way you expected, depending on when it was processed. The lender should be asked to explain any discrepancy rather than assuming the figure is correct or incorrect without checking.

2. The Total Mortgage Arrears

The statement should show the total payment shortfall.

This figure represents the amount by which the payments due have not been fully met, taking account of the relevant payments and adjustments. It is often referred to as the mortgage arrears.

It is important to understand that arrears are not necessarily the same as the amount required to repay the entire mortgage.

For example, you might have a mortgage balance of £145,000 and arrears of £2,700. The £145,000 represents the outstanding mortgage debt, while the £2,700 represents the payment shortfall, subject to the lender’s accounting and the terms of the mortgage.

The distinction matters when you are discussing a repayment arrangement or trying to understand what would be required to bring the account up to date.

If the arrears figure appears higher than expected, ask for a breakdown showing the missed payments, payments credited, charges and any other adjustments that have affected the calculation.

3. Charges Added Because of Mortgage Arrears

A mortgage arrears statement should identify charges incurred as a result of the payment shortfall.

Depending on the account and the applicable terms, these may include administration charges, legal costs or interest associated with the arrears. Not every type of charge will apply to every mortgage.

You should check what each charge relates to, when it was added and how much it was. If a charge is unclear, ask the lender to explain its basis and provide a breakdown.

Do not assume that every charge is incorrect simply because it increases the amount owed. Equally, do not assume that every charge must be accepted without explanation.

If you believe a charge has been applied incorrectly, is inconsistent with the mortgage terms or raises concerns about how your account has been handled, raise the matter with the lender and request a written response.

Where appropriate, you may also consider making a formal complaint.

4. The Total Outstanding Mortgage Debt

Your statement should also provide the total outstanding debt, excluding charges that may be added on redemption, as specified by the relevant FCA rules.

This is different from the arrears figure. It generally refers to the broader amount owed under the mortgage rather than only the missed instalments.

Understanding the distinction is particularly important if you are considering selling the property, refinancing the mortgage or discussing a longer-term repayment solution.

If you need a precise figure to repay the mortgage in full, ask your lender for a redemption statement. A redemption statement is not necessarily the same as an ordinary mortgage statement because it calculates the amount required to redeem the mortgage at a specified time and may include applicable charges.

If you are considering selling a property because of financial difficulties, our guide may also help: What Happens to Mortgage Arrears When You Sell Your Property in the UK?.

5. An Indication of Further Charges

The initial arrears information should indicate the nature and, where possible, the level of charges you are likely to incur if the payment shortfall is not cleared.

This information can help you understand the possible consequences of allowing the arrears to continue.

However, the exact charges that may apply will depend on the mortgage terms, the circumstances of the account and any relevant legal or regulatory requirements.

If the lender refers to future costs without explaining what they relate to, ask for clarification. You should understand which charges have already been applied and which are only potential future costs.

This is particularly important if the amount you owe is increasing despite your efforts to make payments.

Does the Lender Have to Send Mortgage Arrears Statements Regularly?

For regulated mortgage contracts covered by the relevant FCA rules, MCOB 13.5.1 requires a lender to provide a regular written statement at least once every quarter while the account is in arrears.

The statement must cover the payments due, the actual payment shortfall, the debt and, where relevant, charges incurred.

The FCA’s guidance explains that charges may include fees and costs directly resulting from the account falling into arrears, including relevant administration charges, legal fees and interest.

The information should cover the period since the previous statement. The rules also address how annual statements can be used, provided the required arrears information is included.

You can read the relevant requirements in the FCA Handbook: MCOB 13.5 — Dealing with Customers in Arrears.

If you have not received a statement for some time, you can contact your lender and request an up-to-date breakdown. Whether a particular statement or disclosure is required depends on the status of your account and the applicable rules, so explain your circumstances when making the request.

What If the Figures on Your Mortgage Arrears Statement Are Wrong?

If you believe your mortgage arrears statement contains an error, deal with it promptly and keep a record of your communications.

Start by comparing the statement with your bank statements, mortgage payment history and previous correspondence. Check whether the dates and amounts of payments are correct, whether partial payments have been credited and whether charges have been explained.

If you identify a discrepancy, write to the lender and identify the specific entry or figure you believe is wrong. Explain why it appears incorrect and provide copies of supporting documents where appropriate.

Ask the lender to investigate, correct any error and issue an updated statement if necessary.

Keep copies of your request and any response. If you speak to the lender by telephone, make a note of the date, the name or reference of the person you spoke to, and what was agreed.

If the lender does not resolve the issue, you can consider making a formal complaint through its complaints procedure. If you remain dissatisfied after the lender has responded, or it does not respond within the applicable timeframe, you may be able to refer the matter to the Financial Ombudsman Service, subject to its eligibility requirements and deadlines.

A disputed statement does not automatically suspend your mortgage obligations or stop repossession proceedings. If court action has begun, do not ignore court documents while waiting for the lender to investigate.

Can You Challenge Interest or Charges Shown on the Statement?

Yes. If you do not understand how interest or charges have been calculated, you can ask the lender for an explanation.

For example, you may want to establish whether interest has been added to the mortgage balance, whether a charge relates directly to the arrears and whether payments have been applied in accordance with the mortgage terms.

For regulated mortgage contracts, the FCA’s rules require lenders to deal fairly with customers who have or may have payment difficulties. They also require lenders to consider relevant support options in light of the customer’s individual circumstances.

Depending on the case, options may include changes to the repayment arrangement or consideration of interest-related measures. These options are not guaranteed, and an arrears statement alone does not establish that the lender has acted incorrectly.

If your arrears are increasing, you may find our guide useful: Can a Mortgage Lender Freeze Interest on Arrears in the UK?.

If you believe the lender has applied charges incorrectly or has failed to consider your circumstances fairly, ask for a written explanation and consider raising a complaint.

What If You Cannot Afford to Clear the Arrears?

Receiving a mortgage arrears statement does not necessarily mean you must pay the entire shortfall immediately in every circumstance. The options available depend on the mortgage terms, the lender’s assessment and your financial position.

If you cannot afford to clear the arrears in one payment, prepare a realistic budget showing your income, essential living expenses, other financial commitments and the amount you can afford towards your mortgage.

Contact the lender and explain your circumstances. Ask it to consider a practical arrangement for addressing the shortfall, taking account of what you can genuinely afford.

For regulated mortgage contracts, the FCA’s rules require firms to make reasonable efforts to reach an agreement with customers about repaying a payment shortfall and to allow a reasonable repayment period, with particular regard to establishing a practical plan where feasible.

This does not mean that every proposed arrangement must be accepted. However, it is important to communicate with the lender and provide enough information for it to assess your circumstances.

For more information, read Can a Mortgage Lender Refuse to Accept a Payment Arrangement in the UK?.

If you are considering a temporary break from payments, our article Can You Get a Mortgage Arrears Repayment Holiday in the UK? explains the difference between a payment holiday and an arrangement for existing arrears.

What If the Lender Has Started Repossession Proceedings?

If your lender has started or is threatening repossession proceedings, understanding the arrears statement becomes particularly important.

Before commencing repossession action on a regulated mortgage contract covered by the relevant FCA rules, the lender must provide a written update of specified arrears information and clearly state the action it intends to take regarding repossession.

You should check the figures carefully and raise any errors or concerns with the lender. At the same time, do not ignore court forms, hearing dates or deadlines while trying to resolve a statement dispute.

You may wish to seek independent debt advice and appropriate professional guidance about the court process. If you have already proposed a repayment arrangement, keep a copy of the proposal and the lender’s response.

Our guide explains the broader process: Mortgage Repossession Process in the UK: What Happens From Start to Finish.

The applicable procedures can differ depending on the type of mortgage and the part of the UK where the property is located. If the matter has reached court, obtain guidance that relates to your specific circumstances.

How to Request a Mortgage Arrears Statement

If you need an updated statement, contact your lender using its official contact details and explain what information you require.

Ask for a breakdown of the missed or partly paid instalments, the total arrears, payments received, interest and charges applied, and the outstanding mortgage debt. If you are trying to understand how the balance has changed over time, request the relevant transaction history or statements covering the period in question.

If you are preparing to sell the property or repay the mortgage in full, make clear whether you need an arrears statement or a redemption statement, because they serve different purposes.

Keep the request in writing where possible so that you have a record of what you asked for and when.

You can also seek free and impartial money guidance through MoneyHelper, which provides information for people experiencing mortgage payment difficulties.

Final Thoughts: Check Your Mortgage Arrears Statement Carefully

A mortgage arrears statement is an important document for understanding missed payments, the total shortfall, charges and the outstanding mortgage debt. Reviewing it carefully can help you identify discrepancies, understand how your debt is changing and prepare for a discussion with your lender.

For regulated mortgage contracts covered by the FCA’s rules, lenders have specific obligations to provide arrears information and regular written statements. If information is missing or a figure appears incorrect, ask the lender for a clear explanation and request a correction where appropriate.

If you are struggling to repay the arrears, do not wait until the situation becomes more serious. Contact your lender, explain your circumstances and ask about options that may be suitable for your financial position.

How Immediate Bank Claims May Help

Immediate Bank Claims provides independent support, guidance and assistance to property owners experiencing mortgage arrears, repossession concerns, LPA receiver issues and related property or debt difficulties. Understanding the figures in your mortgage correspondence and identifying the questions to raise with your lender can help you make more informed decisions about the next steps.

For further information, visit Immediate Bank Claims.

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.