Option 1: Talk to Your Lender (Do This First, If You Haven’t Already)
This is not the obvious thing. It’s the right thing. Your lender does not want to repossess your home. Repossession is expensive, time-consuming, and messy for them. What they want is their money back, and helping you find a way to pay it is almost always their preferred outcome.
Under FCA rules, your lender is legally required to:
- Treat you fairly and consider your individual circumstances
- Explore all reasonable options before pursuing possession proceedings
- Give you time to seek independent advice
- Not rush to court without following the Pre-Action Protocol first
Contacting your lender to discuss your situation will not affect your credit score. Avoiding their calls and letters will.
When you contact them, they may be able to offer:
Payment holiday: A temporary pause on mortgage payments, typically one to three months. Interest usually continues to accrue, but it gives you breathing room.
Reduced payments: You pay what you can afford temporarily, with the shortfall either added to your balance or addressed through a repayment plan agreed separately.
Interest-only switch: You pay only the interest element of your mortgage for a fixed period, cutting monthly payments significantly. If you’re on a repayment mortgage, this can make a meaningful difference.
Term extension: Spreading your mortgage over more years reduces the monthly payment. You’ll pay more interest overall, but if it means keeping the house, it may be the right trade.
Mortgage Charter commitments: If your lender is one of the 47 signatories to the Mortgage Charter (launched in 2023 and still in force), which covers around 90% of the mortgage market, they’ve committed to not forcing repossession in less than 12 months from your first missed payment, except in exceptional circumstances. They’ve also committed to letting customers switch to interest-only or extend their term without a new affordability check.
One important note: Mortgage Charter support is typically a one-off arrangement with each lender. If you’ve already used it, your lender may have less flexibility under the Charter, but they still have their own hardship measures and are still required to help.
Option 2: The Breathing Space Scheme
If you need time to get your finances in order without the pressure of creditors chasing you, the Breathing Space scheme gives you a 60-day legal pause.
During those 60 days:
- Your lender cannot start new possession proceedings
- Interest on your arrears (not your ongoing mortgage) is frozen
- Enforcement action stops
- Creditors cannot contact you about the debts covered by the scheme
What it does NOT do: Cancel your debt, pause your ongoing mortgage payments, or work with debts from fraud or student loans. It’s breathing room to find a solution, not a solution itself.
How to access it: You must go through an approved debt adviser, such as StepChange, Citizens Advice, National Debtline or another FCA-authorised provider. They assess your situation and submit the application electronically to the Insolvency Service. Approval typically takes one to two working days.
Eligibility: You must live in England or Wales, have debts at an unmanageable level, not currently be in a DRO, IVA or bankruptcy, and not have used Breathing Space in the last 12 months.
What to expect during the 60 days: You’ll work with your debt adviser to review all your debts and create a forward plan. You must keep paying ongoing commitments where you can, not take on new credit, and engage with the advice process. If you don’t cooperate, the scheme can be cancelled early.
The 60 days won’t solve the problem on its own. But if you’re overwhelmed and need time to think clearly, it can be exactly what you need. We cover this in full detail in our guide to the Breathing Space scheme.
Option 3: Support for Mortgage Interest (SMI)
If you’re receiving certain benefits and struggling to cover your mortgage interest payments, you may be eligible for a government loan to help.
What it is: Support for Mortgage Interest (SMI) is a government loan, not a grant, that pays mortgage interest directly to your lender. It covers interest on up to £200,000 of your mortgage (£100,000 for Pension Credit claimants), calculated using a standard rate currently set at 3.66%. Note this is different from the interest rate charged on the SMI loan itself once it’s applied, currently 4.6%, which is what you’ll eventually repay when you sell or transfer the property.
Who qualifies: You must be claiming Universal Credit, Pension Credit, income-related Employment and Support Allowance, or income-related Jobseeker’s Allowance.
Waiting period: If you’re claiming Universal Credit, there’s a three-month qualifying period before SMI payments can begin. Pension Credit claimants can access it immediately.
The key thing to understand: This is a loan secured against your property, repayable when you sell or transfer ownership. It doesn’t disappear. It grows with compound interest (the interest is charged at the government’s standard rate). It’s designed to help you hold on in the short term, not to clear debt permanently.
If you think you might be eligible, the quickest way to find out is to ask your benefits adviser, or contact GOV.UK’s SMI information page. Your benefit adviser can check eligibility and help you apply.
Option 4: Free Debt Advice
If you haven’t already spoken to a free debt adviser, this may be the most important step you take. Not just to understand your options, but to have someone in your corner who knows how to deal with lenders, fill in court forms, and handle the process on your behalf.
All of these services are free, confidential, and non-judgmental:
StepChange Debt Charity
📞 0800 138 1111 (Mon–Fri 8am–8pm, Sat 8am–4pm) | stepchange.org
Can help with mortgage arrears, contact your lender directly, and set up debt management plans.
National Debtline
📞 0808 808 4000 (Mon–Fri 9am–8pm, Sat 9:30am–1pm) | nationaldebtline.org
Expert debt advice including mortgage arrears and court proceedings support.
Citizens Advice
📞 0800 144 8848 (Mon–Fri 8am–7pm) | citizensadvice.org.uk
Free advice by phone, online, or in person. There’s a local Citizens Advice office serving the Wirral.
MoneyHelper
📞 0800 138 7777 | moneyhelper.org.uk
Free government-backed money and debt guidance.
Shelter
📞 0808 800 4444 (Mon–Fri 8am–8pm, Sat–Sun 9am–5pm) | shelter.org.uk
Free housing advice including mortgage arrears and repossession.
These advisers can also apply for Breathing Space on your behalf if that’s the right route for you, help you complete court defence forms, and represent your interests in communications with your lender.
Option 5: Selling the Property
If you’ve explored your options and decided that the mortgage is simply no longer sustainable, or if you’d rather have a clean break and a fresh start, selling the property is a legitimate, respected choice. It’s not defeat. It’s taking control.
Why selling voluntarily beats waiting for repossession:
Repossessed properties typically sell for 10–25% below market value at auction. A voluntary sale, even a quick cash sale, almost always produces a better price. That means more of the debt gets cleared, and there’s more chance you’ll have equity left over rather than a shortfall to carry forward.
The credit impact is also significantly less. A voluntary sale is recorded as a standard property transaction. The missed payments before it are still on your credit file, but the outcome (property sold, mortgage cleared) is far better than a repossession marker.
And you’re in control of the timeline. You choose the sale date, the buyer, the approach. That matters when everything else feels out of control.
Can you sell if you’re in arrears? Yes, absolutely. Your lender will need to consent (since they hold the mortgage charge on the property), but they almost always do. They want their money back, and a voluntary sale with a proper price is the best way to achieve that. We’ve covered this in full in our guide to selling a house with mortgage arrears.
What about speed? If you sell through an estate agent, the standard process takes three to six months. If you need to move faster (to avoid further damage to your credit file, to meet a possession hearing date, or simply to stop the monthly financial bleeding), a cash buyer can complete in two to four weeks.
A Note on Timing
Every week you delay is another missed payment on your credit file. It’s also another week where some options narrow. The Mortgage Charter protections, the Breathing Space scheme, the Pre-Action Protocol process and the ability to prevent a court claim all work best when you engage with them early.
This isn’t meant to frighten you. It’s meant to give you a reason to act today rather than wait until things get worse. Most of the options above are still available even if you’ve already missed several payments. But the earlier you act, the more choice you have.
Getting Support on the Wirral
If you’re a homeowner on the Wirral, the Citizens Advice Wirral service offers free, confidential advice in person, by phone, and online. StepChange and National Debtline both cover the Wirral and can deal with your lender on your behalf.
You don’t have to face this alone.
If selling turns out to be one of your options, tell us about your property. We'll give you a realistic figure in confidence, so you can weigh it up alongside the advice you get from Citizens Advice or StepChange.
