How to get help with mortgage costs as 700,000 struggle with repayments

MORE than 700,000 homeowners are struggling with mortgage repayments – but there is help available.

According to government figures, one in 10 borrowers admit they’ve found it difficult to keep up with their payments over the past year.

We explain how to get help with mortgage costs as 700,000 households struggle with repaymentsCredit: Alamy

The main reasons given were reduced pay due to furlough, working fewer hours, unemployment and an increase in other bills.

The number of struggling households at the end of the year has remained the same since last June and July, according to the latest Household Resilience Study.

Yet the report, which was released this week, comes almost a month after the mortgage holiday scheme closed to new applicants, after being extended several times to help homeowners during the coronavirus crisis.

Eleanor Williams, finance expert of data analyst Moneyfacts, told The Sun: “The pandemic has had a polarising impact on many households, and whilst some have been fortunate, many have experienced an adverse effect on their income.

“As the monthly mortgage payment is often the largest outgoing a family has, ensuring this payment can be met is vital.

“It is important that anyone who is concerned about being able to meet their monthly commitments speaks with their lender and seeks qualified, independent financial advice.”

Below we explain how to get help with your mortgage costs if you’re still struggling.

How to apply for help

Your mortgage is a priority debt, which means the consequences of non-payment are more serious than other debts.

If you’re struggling, it’s important to contact your mortgage lender as soon as possible and apply for help.

You’ll find the contact details on their respective websites, but keep in mind response times may be slower due to Covid.

Also make sure you don’t cancel or reduce your regular payments without speaking to your lender first.

What mortgage help is available for homeowners?

If you’re struggling to pay your mortgage, your lender has to offer you personalised support, depending on your individual circumstances.

This applies if your payment holiday is coming to an end too, if you’re still in financial difficulty. Below we explain some of your options.

Before you apply for help, keep in mind the “tailored” support will be reported to credit referencing agencies, unlike previous payment holidays.

This means it could affect your ability to get credit in the future.

Make no payments for a temporary period

Speak to your lender and they may be able to offer you another payment holiday for a fixed amount of time as a short-term measure.

This could be handy if, for example, you’re unemployed but are set to start a new job in a few months.

Just keep in mind a payment holiday means your repayments will be higher when you start paying again, given the period of non-payments.

You’ll also continue to rack up interest on your debt.

Make reduced payments for a temporary period

If you can make some payments towards your mortgage, but not the full amount, your lender may agree to reduce your payments for a short period.

This is also likely to be a short-term solution only.

Do not reduce your payments without speaking to your lender first as this could seriously damage your credit file.

Change your mortgage term to make payments lower

To make the payments more affordable, your lender may offer to change your mortgage term.

This will mean you pay less each month, but keep in mind you’ll be in debt longer and you’ll end up paying more in interest over the long-term.

If you’ve already fallen behind on repayments

Your lender shouldn’t start repossession action unless all attempts to resolve the situation have failed, according to the financial regulator.

However, if you can’t agree a repayment plan, your lender may look to start court action to repossess your home as a last resort.

They’ll need to consider if it’s appropriate at this time, especially if you’re vulnerable due to Covid, said the Financial Conduct Authority.

If you can’t come to an agreement with your lender, and you’re in financial difficulty, make sure you seek independent debt advice for free.

Below are a few options and their contact numbers.

If you’re not yet on the property ladder, we explain eight things you need to know before you start the process.

Meanwhile, major lenders are shunning 5% deposit mortgages on new-builds under the government’s guarantee scheme.

Home buyers can now fix their mortgage for 40 years – but are they any good? We explain what you need to know.

Mortgage advisor explains why you should never include joke references when transferring money to your mates


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