What Happens if I Can’t Pay My Mortgage?

Picture of Ian Leyden

Ian Leyden

Ian is the Founder Director of Argyll Drummond

can't pay mortgage

If you’re facing difficulty making your mortgage payments, it is important to contact your lender promptly. The sooner you inform them of your situation, the sooner they can advise you of your options.

Before contacting your mortgage lender, have as much information to hand as possible about your income and outgoings. You should be prepared to discuss your present financial commitments and overall financial status. If there are likely to be any significant changes, your lender needs to know.

Here are some of the options that may be presented to you:

Temporary Mortgage Payment Holiday

This entails putting your repayments on hold for a specified duration. However, it’s important to note that interest will continue accruing on your loan during this period, potentially increasing your total interest payment over the long run.

Temporary Shift to Interest-Only Payments

You could opt to only pay the interest portion of your mortgage for a set period. This means you won’t be reducing the loan amount during this time, potentially extending the time it takes to pay off your mortgage in full.

Extension of Mortgage Term

Your lender might propose extending the term of your mortgage to decrease your monthly payments. For instance, you could switch your mortgage from 30 to 35 years. While this will not alter the total debt amount, your monthly payment would be reduced.

Lenders have personnel trained to address concerns like these, so there’s no need to feel hesitant about seeking their help. Picking up the phone and asking for help is the best move. The sooner you make contact, the sooner your lender can provide the necessary support to help with your situation.

Long-Term Implications of Mortgage Support

Whilst the mortgage support options listed above can provide relief in the short term, it’s essential to understand their impact long term. These solutions, while offering temporary help, can result in higher repayment costs due to the growing debt.

Interest Accumulation and Extended Repayment

When you opt for a temporary mortgage payment holiday or switch to interest-only payments, the interest on your loan continues to accumulate. This means that even though you’re not making full repayments, the interest charges are not halted. As a result, your overall mortgage debt increases over time. This will lead to an extended repayment period, potentially delaying the moment when you fully own your property.

Considerations for the Future

It’s crucial to recognise that while these support options can ease things in the short term, they are likely to lead to higher costs in the long term. Once your situation stabilises and you can manage your mortgage payments again, switching back to your standard repayment schedule will be possible.

UK Major Lenders’ Response to the Crisis

The mortgage rates crisis has prompted a response from major UK lenders. In June 2023, prominent financial institutions such as NatWest, Nationwide Building Society, Barclays, HSBC, Santander, Lloyds Banking Group, and Virgin Money agreed to amplify their support measures for borrowers affected by the crisis.

Increased Flexibility for Borrowers

One significant change is that borrowers who have adjusted their repayment term, or changed to interest only plans are now granted increased flexibility. They can reverse their decision within six months without an impact on their credit rating. This lets borrowers make changes to fit in with their financial circumstances.

Balancing Short Term Relief with Long Term Goals

While the ability to reverse changes within six months is undoubtedly a positive step, borrowers should weigh this option carefully against the long term impact. Short term relief might seem appealing, but it’s vital to consider how these decisions could affect you in the years to come.

Seeking Professional Guidance

Given the complexity of mortgages, seeking advice from professionals is strongly recommended. A good financial advisor will help you assess the potential impact of support options on your long term financial situation.


Mortgage support measures can provide breathing room during times of financial difficulty. These solutions are designed for temporary relief but can lead to higher costs in the long run due to the accumulation of interest. Borrowers must carefully consider their long term impact of these support options on their mortgage debt.

The response of major UK lenders to the mortgage rates crisis, particularly their offer of increased flexibility, is a positive step that provides borrowers with more control over their mortgage arrangements. Yet, individuals should make decisions based on an assessment of their financial situation, keeping in mind the goal of eventually owning their property outright.

Our team of financial professionals is dedicated to helping borrowers like you deal with the challenges and make informed decisions that balance short term relief with long term financial security. Trust in Argyll Drummond to be your partner in achieving both immediate stability and lasting financial well-being.

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