Priority Debt: Mortgage Arrears
If you're struggling to pay your mortgage, this is a priority debt because falling behind could lead to your home being repossessed. The earlier you get advice, the more options you have. Contact us for free, confidential help.
Falling behind on your mortgage
Falling behind on your mortgage can be incredibly stressful. Your home is at risk, and if you own the property, it's also a financial asset you could lose. This is a priority debt, which means you should deal with it before most other debts.
If repossession is imminent, contact us straight away. We can help with emergency options, including setting aside a warrant or exploring housing alternatives.
Your mortgage type matters
The options available to you depend on the type of mortgage you have. For example:
- Tracker mortgage
- Interest-only mortgage
- Repayment mortgage
- Shared ownership
We can help you understand what type you have and what that means for your situation.
If you are a leaseholder
If you are a leaseholder, you may also benefit from specialist advice from the Leasehold Advisory Service.
What your lender has to do
Your lender cannot just repossess your home overnight. There is a legal process they must follow, and you have rights at every stage:
1. Initial contact
Your lender must contact you to discuss repayment options before taking any further action. These options can include payment breaks, extending the mortgage term, or adding the arrears to the loan.
2. Pre-action protocol
Before going to court, your lender must follow specific Financial Conduct Authority (FCA) rules (known as MCOB, the Mortgages and Home Finance: Conduct of Business sourcebook) to ensure you are treated fairly. This includes allowing time for you to get debt advice.
3. Default or calling-up notice
If the arrears continue, your lender will send a formal letter. This sometimes gives you 2 months to repay the full loan, which essentially ends the mortgage agreement.
4. Court action
Your lender can apply to the County Court for a Possession Order. At the hearing, the court will consider whether you can maintain payments and clear the arrears over a reasonable time. If you can, the court may let you stay.
5. Repossession and sale
If the court order is not met, the property is repossessed and sold.
6. Shortfall debt
If the sale price does not cover the outstanding mortgage, fees, and interest, the remaining amount is called a "shortfall". Your lender has 6 years to pursue you for this debt (or 12 years for the principal amount under a deed).
The earlier you get advice, the more options you have.
Get help
- Email us at info@youthlegal.org.uk
- Call us on 020 3195 1906
- Fill in our contact form and we'll get back to you
All our advice is free and confidential. You can also check your options at Shelter or Citizens Advice.