Take a close look at your budget

Make a record of all your monthly expenses against your income. Whereas this might seem like an overwhelming task, this will help you better understand your situation and ensure that you are prepared for when you seek help.

Talk to your lender

If you are struggling with your mortgage and are worried that you may miss payments, you might want to consider talking to your lender to avoid repossession. They may suggest:

a) lengthening the term of the mortgage
b) switching to an interest-only payment plan, or
c) taking a payment holiday (where all deferred interest is added to the capital sum).

These options will be more expensive in the long-run, but they will ensure that you have a bit more money in your pocket at the end of each month.

Get free and independent advice

The Citizen’s Advice Bureau is just one of many organisations which offer free, impartial advice. To help your adviser understand your financial situation, make sure you bring with you any loan documentation and recent payslips.

Government schemes

In order to limit the number of house repossessions, the government have three schemes to help those who are struggling to pay their mortgage:

1). Mortgage Rescue Scheme

The Mortgage Rescue Scheme is a government scheme, run by your local housing authority -
the organisation that manages housing for your council. If you are eligible, you could get financial help to stay in your home.

Should you qualify for this scheme, the government will be able to help you in one of two ways. Either they’ll provide you with a low-interest loan to pay off some of your mortgage (and hence reduce your monthly payments) or they’ll buy your home from you and then rent it back to you. Typically, they buy your home at 97% and rent it back at 20% less than the market value. You will no longer own your house, but you will avoid repossession and will be able to stay in your home.

The Mortgage Rescue scheme is only available in England, with separate schemes in place, or being developed, in Scotland, Wales and Northern Ireland. Applications for help from the scheme are made to your local council – search your local council’s website for more information about this scheme.

2). Homeowners Mortgage Scheme

If your family has suffered a dramatic drop in income due to events such as redundancy or a reduction in hours, but expects to get back on track again in the future, you may be eligible for the Homeowners Mortgage Scheme. This scheme allows you to defer some of the monthly interest on your mortgage for up to two years. Speak to your lender about this option.

3). Support for Mortgage Interest

If you are a home-owner claiming Income Support, income-based Jobseeker’s Allowance or Employment & Support Allowance, you may qualify for help paying the interest on your mortgage for up to two years. Please speak to your local job centre to check your eligibility.