Find out how we expect mortgage lenders and administrators to treat you if you're experiencing financial difficulties because of coronavirus (Covid-19).
If you’re struggling to keep up with mortgage repayments due to coronavirus, or you’re coming to the end of a payment holiday and wondering what happens next, find out what your next steps could be.
- talk to your lender if you’re struggling to manage your finances
- if you can afford to repay your mortgage, even if it’s a smaller amount than usual, you should do so
- you shouldn’t cancel your regular payments without speaking to your lender first
- if you have general questions for your lender, check their website first to see if the answer is available online
Learn more about:
- tailored support from your lender
- lender support
- where to find help managing money and debt
- help for customers in vulnerable circumstances
If you’re finding it difficult to pay your mortgage because of coronavirus, your lender should provide you with support tailored to your individual circumstances. This support will be available if you’re struggling for the first time or if you’ve already had a payment holiday that’s coming to an end.
Your options could include:
- making no payments for a temporary period
- making reduced payments for a temporary period
- changing your mortgage term to make your payments more affordable
Your lender should be clear about what these options will mean for you, and what this support could mean for your credit file.
Contacting your lender
Contact your lender as soon as possible if you’re finding it difficult to pay your mortgage. Contact details should be available on your lender’s website and on their other communications with you.
Lenders have committed to responding as quickly as possible but, due to high levels of demand and staff having to work from home, service levels might be slower than usual.
If you have a general question for your lender, check their website first to see if the answer is available online.
Working with your mortgage lender
Before agreeing to any support, your lender will need to collect information on your circumstances and should give you enough information so you can make an informed decision. This may include directing you to their website, so you can learn about the different options available.
They should explain that, if you agree to make no, or reduced, payments for a temporary period, the amount you pay in the longer term is likely to increase.
It’s important to be open and honest about your financial situation with your mortgage lender, so you can agree an option that is right for you.
The deadline to apply for a payment deferral under the Payment Deferral Guidance was 31 March 2021 and all payment deferrals issued under this guidance ended on 31 July 2021.
If you are newly affected by coronavirus (or if it starts affecting you again) your lender should provide support tailored to your circumstances, under our Tailored Support Guidance. This may include agreeing to reduced or no payments for a time, if that is appropriate, even if you had a payment deferral previously under the Payment Deferral Guidance. If you can afford to pay your mortgage, it’s in your best interests to do so.
Lender support and your credit file
If your lender agrees to provide you with more support under our Tailored Support Guidance, this may be reported to your credit file in accordance with normal reporting processes. Your lender should tell you what this will mean for you and your credit file.
Find out more about managing money and debt if you've been affected by the coronavirus pandemic.
This information might also be helpful to you if you were struggling to make payments before the pandemic, if you’re in longer-term financial difficulty, or if you’re worried about how you will manage your payments and debts in the future.
If you’re claiming a benefit such as income-related Employment and Support Allowance, Income Support or Universal Credit, you might be able to claim help with your mortgage interest payments. Information on eligibility and how to claim is available from MoneyHelper.
For more information on managing your money during and after the coronavirus pandemic, you can also use MoneyHelper's Money Navigator tool.
Your lender shouldn’t start repossession action unless all reasonable attempts to resolve the position have failed. But if you can’t agree a repayment plan, your lender may look to start court action to repossess your home.
Lenders may start repossession proceedings, seek a court hearing, and ask the court to grant an order for possession.
In all cases, your lender should take extra care to consider if it’s appropriate to seek repossession at this time, especially if you’re particularly vulnerable to circumstances related to coronavirus.
If you’re facing repossession, find out where you can get free debt advice.
Financial implications if repossession is stopped
If your lender delays repossession of your home (for example, due to government restrictions preventing repossession or due to the risk you face from coronavirus) and you don’t keep up with payments, the total amount you owe will increase. This is because interest will continue to be charged (plus any fees and charges you may owe according to your lender’s tariff of charges).
This means you may get less back if your property is repossessed later and then sold by your lender. This could also happen if property prices fall before your property is sold. If your property is sold for less than you owe, you might not get anything back and you may still owe money to your lender.
Your lender should make sure you are kept fully informed and should discuss the potential consequences of delaying repossession.
They should explain what this could mean for any remaining equity (for example, if the amount you owe increases, or if the value of the property falls).
Contact your lender for more information about how this might affect you.
Lenders should consider the needs of customers who may be vulnerable.
Circumstances that may cause you to become vulnerable include:
- poor health (physical or mental)
- low financial or emotional resilience
- life events such as bereavement or divorce
- low capability, including poor digital skills (eg your ability to communicate and make transactions online), language and cognitive skills, and low financial capability.
Coronavirus, and the measures introduced to help manage the pandemic, such as local restrictions, may affect personal circumstances in ways that could cause vulnerability.
Lenders should be aware that an individual’s circumstances could change quickly in a way that could make them vulnerable.
If you think you’re in circumstances that mean you’re vulnerable, it’s important to let your lender know when you contact them, so they can work out how best to support you.
16/06/2020: Information changed Working with your mortgage lender section update following guidance update
02/06/2020: Information added new measures confirmed
22/05/2020: Information added Mortgages and coronavirus: updated draft guidance for firms
25/03/2020: Information added Information updated.