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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 3rd September 2020*

We regularly receive questions from customers who can’t afford a mortgage and need advice. These queries don’t just come from first-time buyers or homeowners who are struggling to keep up with or can’t afford their mortgage repayments, they also come from those who can’t afford a mortgage full stop.

Jump to our calculator journey to establish what you can afford, the costs and which of the best deals you’ll qualify for.

Whatever your circumstances, we’re here to help and advise you.

This article covers:

If you’re short on time and prefer to get specific advice about your own current situation, get in touch on 0808 189 2301 or make a quick online enquiry.

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Help! I can’t afford my mortgage. What can I do?

Life is unpredictable, with a habit of throwing obstacles in our paths which can drastically alter our financial situation. If you’re an existing homeowner, you may find that such incidents result in you defaulting on your mortgage payments for a month or so, or you could find yourself in a situation where you simply cannot afford a mortgage anymore.

The good news is that there could be a number of options available, including government schemes, specialist mortgage products and bespoke advice from the expert mortgage brokers we work with.

First of all, talk to your lender

Customers often approach us with questions like “I can’t afford my mortgage this month. What can I do?” and we always tell them, first and foremost, to contact their lender.

While there may be other options available, if this is going to be a long-term issue, in the short term, your lender might agree to…

  • Extend the mortgage term without remortgaging: This will reduce your monthly mortgage payments by spreading the cost over a longer period.
  • Grant a payment holiday: This might give you time to get back on your feet financially, but can have an impact on your credit rating.
  • Offer to defer the payment: If you expect your financial difficulties to be short lived, you could ask your lender if you could defer the mortgage payment for a set period and make up the difference on a pre-agreed date.

What options are available when you can’t afford mortgage payments?

If you’re a homeowner and can’t afford your mortgage payments, don’t panic – there are 5 options that could help:

  1. Remortgaging
  2. Switching to interest only
  3. Product transfers
  4. Equity release
  5. Government schemes

1. Remortgaging

Remortgaging involves refinancing your mortgage in order to obtain either a better rate or better terms, particularly if you can’t afford the mortgage repayments. If you are currently on a lender’s variable rate  you’re likely to get better rates after remortgaging (at least in the short term) meaning your mortgage payments will be lower and hopefully more affordable.

Remortgaging can also allow you to change the term of the mortgage to lower your payments and make it more affordable. Subject to your age, income and credit rating, you could reduce your monthly mortgage payments by spreading the cost over a longer period.

Remortgaging to consolidate debt

Although you might be feeling the pinch from the mortgage payments, it can be other debts causing you financial pain. If so, it might be worth exploring the possibility of adding other debts to your remortgage to lower your overall monthly outgoings

Bear in mind though, if you’re still tied into an initial deal you might have to pay an early repayment charge as well as other fees associated with remortgaging.

Securing additional debt against your home is a major financial decision,  not to be taken lightly.

Get expert independent advice before committing to any financial arrangement involving securing debt against your home. Get in touch on 0808 189 2301 or make an enquiry to talk to one of the expert mortgage brokers we work with.

We’ll match you with a broker experienced in helping people to remortgage and consolidate debts. They’ll be happy to answer all your questions and advise you of your options. The service is free and there’s zero obligation.

Second charge mortgages

If you’re tied in with your current lender, or don’t want to lose your favourable rate, but need to clear debts to improve your financial position you could consider a second charge mortgage as a way to raise additional funds.

There are lots of options around remortgaging and if it’s what you think you’d like to arrange, speak to one of the expert brokers we work with and let them help guide you through the process.

Call 0808 189 2301 or make a quick online enquiry to get started.

2. Switch to interest only

Assuming you’re on a capital repayment mortgage, switching to an interest only agreement with the same lender, or a new lender, might be an option.

With an interest-only mortgage, you only pay off the interest each month and the loan itself is due in full at the end of the term. This can mean significantly lower monthly payments, but you’ll need to evidence a viable repayment vehicle in advance to settle the outstanding debt upon conclusion of the mortgage agreement.

3. Product transfer

Similar to above, you could consider a product transfer.

If you’ve been moved to your lender’s standard variable rate (SVR) and the interest rate has risen, resulting in you being unable to afford your mortgage repayments, you may be able to move to a fixed rate mortgage with your current lender. This would assume you wish to keep your loan amount the same.

The main advantages of a product transfer over a remortgage is that you are unlikely to be subject to a full valuation and there doesn’t tend to be any complicated legal processes involved, making a less costly option.

However, product transfer rates can tend to be higher than those offered to new customers. So make sure you’re getting the best deal by talking to a whole-of-market mortgage broker, like the ones we work with.

Get in touch on 0808 189 2301 and we’ll match you with a broker experienced in mortgage transfer products who can advise you of your best options based on your own specific circumstances.

4. Aged 55 or over? Consider equity release

Equity release, also known as a lifetime mortgage, allows borrowers over 55 to release cash from their property without leaving their home, meaning you’re not faced with unwanted upheaval or moving expenses.

Typically, there are no monthly repayments (or you can choose to repay a more affordable fixed rate). The outstanding balance will then be repaid after the sale of the property, either when you move at a later date, go into residential care or pass away.

5. Government schemes

There are several government schemes which could help you out if you’re unable to pay your mortgage.

In England, there’s Support for Mortgage Interest (SMI), which had its status changed from a benefit to a repayable loan in April 2018.

SMI can only help you out with the interest you’re paying on top of your mortgage repayments, not the repayments themselves. It’s repayable when you sell the property or transfer its ownership to somebody else.

You will need to be in receipt of benefits or qualify for benefits to receive an SMI loan. You can read more about the scheme on the government website.

The Scottish and Welsh governments run their own versions of SMI.

To get advice on all or any of these 5 options when you’re struggling to pay your mortgage, get free, no obligation advice from one of the expert advisors we work with.

Call 0808 189 2301 or make a quick enquiry and we’ll match you with an expert who can answer all your questions and work with you to help resolve your mortgage issues.

What if I’m getting divorced and can’t afford my mortgage?

If you’re getting divorced and your name is on the mortgage you’ll be expected to keep up with your payments, even if you’ve moved out of the property.

Should either you or your partner stop paying a joint mortgage, this can damage both of your credit ratings as you each agreed to be liable for the debt when you signed up for the loan.

If you can’t afford your share of the mortgage, possible options include:

  • Transferring the mortgage into your partner’s sole name (which might not be ideal if you were planning to continue living in the property). Contact your lender about this, although they are under no obligation to grant the request.
  • Remortgage, if you’re planning to remain in the property.
  • Take out a product transfer.
  • Ask your lender if you can switch to an interest-only mortgage.
  • See the opening sections of this article for additional possibilities.

There’s no specific help from either the government or mortgage lenders for divorcees who are unable to keep up with their mortgage payments, but make an enquiry and speak with one of the expert mortgage advisors we work with for a free, no obligation chat about what options might be possible for you.

What if I’m on maternity leave?

Many of the same options discussed in the sections above will be available if you can’t afford to make mortgage repayments due to a drop in income while on maternity leave, but first you should contact your lender and let them know you’re struggling to meet your repayments.

Some lenders may consider offering you a payment holiday or adjusting the term length under these circumstances, but there may be other options available.

What if my partner has died?

If you’re in a joint mortgage and your partner passes away, the mortgage debt won’t automatically be transferred into your sole name, regardless of any will that’s in place.

This is something you’ll need to apply to your mortgage provider for. Your lender will want to carry out affordability checks and will only agree to the transfer if you can prove you’re able to afford the mortgage on your own.

Some borrowers fall back on savings or life insurance policies in this situation. If that’s not a possibility for you, take a look at the opening sections of this article for possible alternatives or call 0808 189 2301 and speak to one of the specialist advisors we work with.

We’ll match you with a broker we work with, ensuring they have expert experience in helping people in similar circumstances. They’ll be happy to answer your questions and give you the advice you need.

What if I can’t afford my second mortgage?

Many of the options we’ve discussed throughout this article will apply to homeowners who are struggling to pay a mortgage on a second home. Consult the opening sections for potential courses of action.

Some borrowers in this situation have remortgaged their home onto a buy- to-let agreement and used rental income to pay off the mortgage. You can read more about BTL mortgages on our dedicated buy-to-let mortgages page.

What if I can’t afford to buy a house?

We often hear from customers who think they can’t afford to get onto the property ladder, but they’re not always right about that.

There are a range of products and schemes which can help borrowers whose affordability is tight, including…

These are just a few of the options that might be available if you think you might be turned down for a mortgage on affordability grounds.

Make an enquiry to speak with an expert advisor and find out what other alternatives might be on offer.

Speak to a mortgage affordability expert today

If you have questions about mortgage affordability and want to speak to an expert for the right advice, call 0808 189 2301 or make a quick online enquiry.

We’ll match you with a broker experienced in handling cases similar to yours. They’ll be happy to answer all your questions and spend time outlining all the options you may have in order to successfully get the mortgage you want.

The service we offer is free, there’s no obligation or marks on your credit rating either. And, when you successfully get a mortgage through one of the brokers we work with, there’s still no fee.

Updated: 3rd September 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.