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What to do if you can't afford your mortgage

If you are reading this at midnight worrying about next month's mortgage payment, you are not alone, and the legal protections around you are stronger than the lender's letters make them sound. This page walks through the order to do things in: free advice first, your lender's legal duties second, government help third, and selling only if the underlying position is genuinely unrecoverable. Free debt advice is available now: StepChange 0800 138 1111, Shelter 0808 800 4444, Citizens Advice 0800 144 8848, MoneyHelper 0800 138 7777.

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Quick answer: Speak to your lender before you miss a payment if you can: under FCA rules and the Mortgage Charter they must consider support such as a temporary interest-only period or a term extension, and missed payments only lead to repossession after a long, regulated process. Free, independent advice is available from the services listed on this page. Selling, including a fast cash sale, is one option, not the first one.

Written and reviewed by the South Yorkshire Property Buyers team. Last reviewed: 24 May 2026.

South Yorkshire Property Buyers: when free advice has run its course, this is how we work with homeowners across Sheffield, Doncaster, Rotherham and Barnsley.

Get free advice tonight if you're in trouble

Before anything else on this page: before you read about the Mortgage Charter, before you consider whether selling is the right call, before you do anything at all, make two free phone calls. They are open into the evening, they are not selling anything, and they will help.

The single biggest predictor of a bad outcome in mortgage difficulty is silence. The Money and Mental Health Policy Institute has found that people in problem debt are more than three times as likely to attempt suicide as those who are not, and that creditor letters and silence at home are specific triggers. Phone someone today. Tell a partner, sibling, or friend. The conversation gets harder the longer it is left, and the financial position gets harder with it.

Then make the second call: your lender's mortgage support team. Ask explicitly for "the team that deals with customers in financial difficulty". Under the FCA's Mortgage Charter rules and the strengthened MCOB 13 forbearance framework (see below), simply asking for help does not affect your credit file. It puts you inside the protection regime described in the rest of this page.

Work out where you actually stand: mortgage payment calculator

Before you read another word about the Charter, the Pre-Action Protocol or selling, see your real number on the screen. Enter your outstanding loan balance, the rate you're paying (or worried about going onto) and the years left. The calculator updates instantly, including what happens if the Bank of England rate moves another 1% or 2% against you.

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If your rate rises at renewal

    Honestly, does that monthly figure work for your household?

    Good. Keep that buffer, and read the rest of this page anyway.

    If the figure works, your priority is staying ahead of any rate change at renewal. The Mortgage Charter (next section) lets you lock in a new rate up to six months before your current deal ends without penalty. The forbearance options below also exist for short, unexpected shocks: illness, redundancy, divorce, even when the underlying mortgage is affordable in normal times.

    You're in the zone the Mortgage Charter was built for.

    The Charter lets you switch to interest-only for six months or extend your term to reduce monthly payments, both with no affordability check and no credit-file marker. For the loan amount above, switching to interest-only typically cuts your payment by 30-40%. That alone can absorb a 2% rate shock. Read the Charter section below before you do anything else.

    If after running those options the maths still doesn't work, an honest sale on your terms, while you still have equity and time, almost always beats waiting for a forced sale at the wrong end of the year. That route is covered further down the page.

    You're not alone, and the order of what to do next matters.

    Make the two free calls at the top of this page first. StepChange and your lender's hardship team. Both are free, neither will judge you, and asking the lender for help is not a credit-file event under the Mortgage Charter. They have legal duties to try forbearance, term extension and interest-only switches before any repossession step.

    If you've already had those conversations and the position is unrecoverable, selling on your own terms, while you still have time, equity and a clean title, is almost always a better outcome than waiting for the court timeline. We don't charge fees, there's no obligation, and we can give you a written offer within 48 hours so you know what's on the table.

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    For illustration only, not financial advice. Your actual payment depends on your lender's product terms, any product fees, and any arrears already on the account. Get personalised free advice from StepChange or MoneyHelper.

    What the law says your lender must try first

    This is the single most under-known fact in UK mortgage distress. Your lender, if it is one of the 49 signatories representing about 90% of the regulated UK mortgage market, has substantial legal obligations to attempt every reasonable forbearance option before it can begin to repossess. Those obligations sit in three layered structures: the FCA's MCOB 13 rules, the Civil Procedure Rules' Pre-Action Protocol for mortgage possession claims, and the voluntary Mortgage Charter sitting on top.

    The FCA's MCOB 13 forbearance rules, materially strengthened by Policy Statement PS24/2 in effect from 4 November 2024, require lenders to: engage with you early; consider you as at risk of difficulty, not just already in arrears; publish their forbearance options on their website; tell you in advance how each option will be reported to credit reference agencies; and, in genuine hardship, consider waiving capital or interest. Repossession must be a measure of last resort.

    The Pre-Action Protocol (published as part of the Civil Procedure Rules) requires the lender, before issuing a possession claim, to send you a schedule of the arrears in writing, consider any reasonable proposal you make, postpone the claim where you have applied for benefits or insurance, and postpone the claim where your financial position is likely to improve in the foreseeable future. Crucially, the protocol explicitly contemplates a sale by you as a route to clear arrears, and requires the lender to postpone court action while a realistic sale plan is in progress.

    The FCA Consumer Duty (Principle 12), applied to existing products from 31 July 2024, places an outcomes-based obligation on lenders to deliver good outcomes for retail customers across the full mortgage lifecycle, including arrears handling. The FCA has been clear that arrears practice that fails the Consumer Duty test is enforceable.

    At the first possession hearing, judges actively check the lender's compliance with the Pre-Action Protocol checklist. If the lender has not complied, the court routinely adjourns the hearing, and as of 2025, you have a free duty solicitor beside you in court to argue your case under the Housing Loss Prevention Advice Service. There is no means test for the in-court element of the service. More on that in the legal-help section below.

    The Mortgage Charter, in plain English

    The Mortgage Charter is a voluntary HM Treasury code first signed in June 2023 and last updated on 17 December 2025. Forty-nine lenders have signed up, between them representing roughly 90% of the regulated UK mortgage market. Between July 2023 and December 2025, around 311,000 mortgages used Charter measures to reduce monthly payments.

    The four commitments that matter most for someone struggling to pay:

    The Charter is voluntary, not statutory. Its protections are owed by signatory lenders as a matter of public commitment. They are not directly enforceable in court the way MCOB 13 is, but the FCA has said that non-compliance is relevant to its Consumer Duty assessment. In practice, the Charter is widely honoured. Major signatories include Barclays, Lloyds (Halifax, Scottish Widows), HSBC (First Direct), Santander, NatWest, TSB, Virgin Money, Nationwide, Skipton, Yorkshire and Coventry Building Societies. Check the current signatory list at gov.uk before assuming the protection applies to your specific lender; a small number of specialist lenders are not bound.

    What other forbearance options exist if the Charter isn't enough

    If the Charter measures don't resolve the underlying problem, typically because the payment shock is structural, not temporary, your lender's tailored forbearance options sit one layer down. These involve an affordability check and are usually reported to credit reference agencies, but they go deeper than Charter measures.

    Two practical points. First, the lender must, under PS24/2, tell you how each option will be reported to credit reference agencies before you commit. Ask. Second, forum experience repeatedly shows that the second or third call to the same lender produces a different and more constructive answer than the first; the first call-handler is often junior. Politely ask to speak to a senior arrears-team member if the first response feels thin.

    Get any agreement in writing. Oral arrangements with call-handlers are common but the lender's written confirmation is essential.

    Government help: Support for Mortgage Interest and local hardship schemes

    If your income has dropped because of redundancy, illness, separation or a similar event, two government-funded routes can help bridge the gap.

    Support for Mortgage Interest (SMI) is a government loan: not a benefit: that covers interest on up to £200,000 of mortgage (£100,000 if you receive Pension Credit) at the standard rate of 3.66% as of April 2026. The loan is secured against the property as a second charge, accrues interest, and is repayable on sale, death or transfer. There is a three-month qualifying wait if you are on Universal Credit; no wait on Pension Credit. Working Universal Credit claimants can also receive SMI. Details at MoneyHelper and Shelter.

    SMI take-up is historically very low because the loan element deters many borrowers, and the three-month wait on Universal Credit is real. But for a borrower whose income drop is recoverable within 12-24 months, a temporary illness, a redundancy followed by a likely return to work. SMI is a genuine tool and the first call to the DWP starts the clock.

    Apply for Universal Credit immediately on any income drop, even if you think you won't qualify; some households with incomes up to £40,000 still qualify for an element of UC, and the application also starts the SMI qualifying clock.

    Each South Yorkshire council also runs hardship schemes that can help with the wider household budget while the mortgage piece is being sorted:

    Council tax arrears collection is materially more aggressive than mortgage collection, magistrates' court liability orders can be obtained within months and bailiff enforcement is swift. If money is short, the council tax conversation needs to happen alongside the mortgage one.

    What happens if you do nothing

    The cost of doing nothing is the most underestimated cost in this whole area. A borrower who simply misses payments and waits incurs: arrears management fees of £25-£50 per month, interest on the arrears balance compounded at the contractual rate, possession-claim court fees (currently £391) and the lender's solicitor costs (£700-£1,500 for an uncontested claim) recoverable from you if the claim succeeds. Add a county court judgment and repossession default, recorded on your credit file for six years, with a meaningful uplift on the cost of any future borrowing.

    UK Finance's Q1 2026 statistics show 79,110 homeowner mortgages in arrears across the UK: the lowest figure in three years: but with 1,250 homeowner repossessions completed in the quarter, up 38 on Q4 2025. Yorkshire and the Humber accounted for around 1,951 possession claims in the year to September 2025, up from 1,445 the prior year. South Yorkshire's specific contribution is roughly 600 claims a year, or 12 a week.

    The pattern in the StepChange data is also worth knowing: among StepChange clients with a mortgage, average mortgage arrears rose 22% in 2025 to £12,534, on top of an 82% rise the previous year. Once you are in arrears, the arrears grow.

    For a borrower whose underlying position is structurally unrecoverable, doing nothing is the most expensive course of action by a substantial margin. The right answer at that point is not "wait and see" but a planned exit, usually a controlled sale.

    When selling is the honest answer

    Selling is not the first call for most borrowers reading this page. For the borrower whose payment shock is temporary: a fix-end on a fundamentally sound household, a short-term redundancy with a return to work in sight, a medical issue likely to resolve, the lender route is the right answer and will work. The Charter, MCOB 13 and SMI are designed exactly for that case.

    Selling becomes the honest answer when the underlying position is structurally unrecoverable. The signs:

    The decision worth making at that point is not between selling and staying. It is between selling now on your terms versus being forced to sell later on your lender's terms. The financial difference between those two outcomes is usually substantial.

    For borrowers who have already received court paperwork, the relevant guide is our selling before repossession page and the deeper how to stop house repossession in South Yorkshire guide. This page is the earlier-stage counterpart, before the court paperwork arrives.

    Selling: your three real options compared

    Once you have concluded a sale is the right answer, three legitimate routes exist: an estate agent on the open market, a property auction, or a cash buyer. Each carries a different trade-off between headline price and certainty of completion.

    Estate agent (open market). Highest headline price, typically 92-98% of open market value. Slowest. In South Yorkshire, days on market range from 35-55 days in the affluent S10/S11 areas of Sheffield to 80-120 days in parts of Doncaster and Barnsley. From listing to completion realistically 4-6 months. You pay agent commission (1.0-1.8% plus VAT in South Yorkshire), conveyancing (£900-£1,500), EPC (£60-£120), and mortgage interest of £680-£900 per month on a £150,000 outstanding mortgage at 4.5% across the entire sale period. Around 25-30% of agreed sales fall through before completion. For a distressed borrower in arrears, a chain collapse can be catastrophic, the lender's patience may not survive another four-month restart.

    Auction. Faster, 6-12 weeks from instruction to completion. Auctioneer fee typically 2% plus VAT, often with a minimum entry fee. Sale price typically 75-88% of open market value, with high variance depending on demand on the day and reserve setting. Properties below reserve simply don't sell.

    Cash buyer. Lowest headline price, typically 80-85% of open market value. Fastest, 2-4 weeks once a solicitor is instructed, sometimes 7 days. No agent fee. Legal fees covered when the seller uses our recommended solicitor (your own solicitor remains your right; you pay those fees yourself). No EPC required for the offer itself. No chain. No survey down-valuation risk. No mortgage-application risk on the buyer side.

    A worked example, a Sheffield Hillsborough terrace

    To make the trade-off concrete, take a real-world South Yorkshire scenario. A three-bedroom terrace in Hillsborough (S6), bought in March 2021 for £180,000 with a £162,000 mortgage at 1.79% on a 2-year fix. The fix ended in March 2023; the household is now on a 5-year fix at 4.69%, with the monthly payment having risen from £582 to £839. The mortgage outstanding today is around £148,000. The property is worth roughly £210,000 based on current S6 comparable sales. The household income has dropped £6,000 after one earner moved to a lower-paid role following redundancy, and one mortgage payment has been missed.

    Four options and their honest net outcomes:

    The honest reading: Option B produces the most net cash if it completes; Option A is the best immediate move if forbearance can hold the position long enough for Option B to play out. Option D: the cash buyer: becomes the right answer once the lender's patience is genuinely running out, once a chain has already collapsed, or where the headline £25,000 in four weeks is materially better than a £53,500 figure that arrives six months too late and after another £5,000 of mortgage interest, fees and stress.

    Compare options end-to-end on our cash buyer vs estate agent page.

    Selling fast to a cash buyer, what it actually looks like

    If a cash sale is the right answer, the practical timeline is:

    1. Initial enquiry (form on this site or phone call). We ask about the property, your situation and the timeline. No fee.
    2. Initial assessment and offer (within 24 hours). Written offer with a clear basis. Our offers are typically 80-85% of open market value based on independent comparables in your postcode. The offer is guaranteed for 14 days.
    3. You take advice. Tell us "yes", "no", or "I need a few days to think". We will not pressure you. If you have not phoned StepChange yet, do it now. If you want a second valuation from a local estate agent to anchor the figure, do that too, agent valuations are free.
    4. Solicitors instructed. Your own solicitor remains your right at any stage; we cover legal fees only when you use our recommended panel solicitor. Anti-money-laundering ID checks happen here, not before.
    5. Conveyancing. Title checks, lender redemption statement, exchange. Typical timeline 2-4 weeks. Some cases close in 7-10 days. Cases involving negative equity (where the lender's consent-to-sell is needed) add 2-4 weeks.
    6. Completion. The outstanding mortgage, including arrears and fees, is paid to the lender directly from the sale proceeds at completion. Any balance comes to you.

    Three principles that should be true of any cash buyer you deal with, including us:

    Verifying any cash buyer, the six-check playbook

    Cash-buying has a reputation problem for good reasons. The FCA has prosecuted multiple operators since 2022 for running illegal sale-and-rent-back schemes targeting struggling homeowners, with the most recent conviction in March 2026. Any firm offering you a "sell and stay as a tenant" arrangement in 2026 is almost certainly operating outside the law. Apply the six checks below to any cash buyer, including South Yorkshire Property Buyers.

    1. Companies House. Look up the buying entity at find-and-update.company-information.service.gov.uk. Confirm the company exists, is active, has been incorporated for at least 24 months, has filed accounts on time, and lists the directors named on the website.
    2. FCA register (for any activity that touches regulated services, such as sale-and-rent-back). At register.fca.org.uk. A straightforward cash purchase from a willing seller is outside FCA regulation, but anything beyond it should be on the register.
    3. The Property Ombudsman membership. All legitimate residential property buying companies should be TPO members. Verify at tpos.co.uk.
    4. NAPB code of practice. The National Association of Property Buyers requires its members to follow TPO's Code of Practice for Residential Property Buying Companies.
    5. AML registration. Cash-buying activity is in scope of the Money Laundering Regulations 2017; the buyer must be AML-registered, either as an estate agency business or by HMRC. Ask for the registration number.
    6. ICO registration. Any business handling personal data must be on the ICO register.

    In addition to the six checks, four practical red flags. (i) Ask for proof of funds: a solicitor's letter on letterhead, dated within 14 days, confirming cleared funds in the buyer's client account or in a designated funding partner's account. A real cash buyer can produce this within 48 hours. (ii) The legal entity buying the property should be the same entity on the website and Companies House; a different name appearing at exchange is a red flag. (iii) No upfront fees, ever. (iv) Verbal offers are not offers: get it in writing, with the calculation basis, and an offer period (ours: 14 days from the date the offer is made).

    South Yorkshire specifics, what your house is worth and where to get help

    The national guides do not have local detail. Here is the South Yorkshire context for this question as of early 2026:

    Average house prices (Land Registry HPI, February 2026):

    Local employer context. South Yorkshire's economic base retains material single-employer exposure. Liberty Steel's restructuring across Stocksbridge and Rotherham has put around 1,450 jobs at risk between 2024 and 2026, with the Rotherham plant not producing steel since July 2024 and many workers surviving on 85% of contracted wages. Government-appointed special managers took oversight in September 2025. If your household income has dropped because of a Liberty event, or any other large-employer event in the region, that is exactly the kind of structural change that the Charter and SMI are designed for, and exactly the kind of case where the lender's vulnerable-customers team should be told explicitly.

    Local Citizens Advice contacts, with debt-specialist caseworkers:

    If court paperwork has arrived, the Housing Loss Prevention Advice Service provides free legal advice from the moment a written possession notice is received, and free duty-solicitor representation at every county court possession hearing: at Sheffield Combined Court Centre, Doncaster County Court, Rotherham and Barnsley County Court. No means test for the in-court element. The expansion of HLPAS in 2025 to cover pre-action advice as well as in-court representation is one of the most under-publicised borrower protections currently available. Call Civil Legal Advice on 0345 345 4345 to be matched with a participating solicitor.

    The law on a lender's duty to obtain a proper price

    One final legal point that hardly any cash-buyer page mentions, and which strengthens the case for a controlled sale by you. A repossessing lender does not have an unqualified right to sell at whatever price. In Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949, the Court of Appeal confirmed that a mortgagee selling under its power of sale owes a duty of reasonable care to obtain the true market value at the date of sale. The principle was extended and clarified in Silven Properties Ltd v Royal Bank of Scotland plc [2003] EWCA Civ 1409. If the lender forces an auction and recovers materially less than a credible private sale would have produced, the lender can be sued by the borrower for the shortfall.

    For practical purposes, this means a credible cash offer in your hand is not just a commercial fact, it is also a legal fact relevant to any future dispute with the lender. A lender that ignores a credible offer and sells lower at auction is on weaker legal ground than it might think. That gives you negotiating leverage if your lender is slow to consent to a sale or impatient to begin proceedings.

    Frequently asked questions

    What should I do tonight if I can't afford this month's mortgage payment?

    Two free calls. First, a debt charity: StepChange on 0800 138 1111, Citizens Advice on 0800 144 8848, or MoneyHelper on 0800 138 7777. Second, your lender's mortgage support team, under the Mortgage Charter signed by lenders representing around 90% of the UK mortgage market, simply asking for help has no impact on your credit file. Tell a partner, sibling or friend at the same time; silence makes the position worse.

    Will my lender repossess my house straight away if I miss a payment?

    No. The FCA's MCOB 13 rules (strengthened by PS24/2 in November 2024) and the Civil Procedure Rules Pre-Action Protocol require lenders to attempt every reasonable forbearance option before going to court. Mortgage Charter signatories have committed to a minimum 12 months from the first missed payment before forcing any borrower out, except in exceptional circumstances. Repossession is a last resort, not a first move.

    What is the Mortgage Charter and does my lender follow it?

    The Mortgage Charter is a voluntary HM Treasury code, signed in June 2023 and updated in December 2025, that 49 lenders representing around 90% of the regulated UK mortgage market have signed up to. Between July 2023 and December 2025, around 311,000 mortgages used Charter measures (term extension or interest-only switch) to reduce monthly payments. Major signatories include Barclays, Lloyds (Halifax), HSBC, Santander, NatWest, TSB, Nationwide and most building societies. Check the current signatory list at gov.uk before assuming the protection applies to your specific lender.

    Can I switch to interest-only payments without it hurting my credit file?

    Yes: under the Mortgage Charter, you can switch to interest-only payments for up to six months, or extend your mortgage term, without an affordability check and without it being reported as a forbearance arrangement on your credit file. Both are reversible. You will accrue more interest over the life of the loan, but you will not be marked down for using the Charter.

    What is Support for Mortgage Interest (SMI) and how much can I get?

    SMI is a government loan: not a benefit: that covers interest on up to £200,000 of mortgage (£100,000 if you receive Pension Credit) at the standard rate of 3.66% as of April 2026. There is a three-month qualifying wait if you are on Universal Credit; no wait on Pension Credit. The loan is secured against the property as a second charge, accrues interest, and is repayable on sale or death. Apply through GOV.UK once you are receiving a qualifying benefit. Take-up is historically low because the loan element deters many borrowers, but for a recoverable income drop it is a genuine tool.

    Can I sell my house if I am already in mortgage arrears?

    Yes. Arrears do not prevent a sale. The Pre-Action Protocol explicitly requires lenders to postpone court action where you can show a realistic sale plan. The outstanding mortgage, including arrears and fees, is repaid from the sale proceeds at completion. A cash buyer can usually complete fast enough to settle arrears before the lender obtains a possession order, and even where a possession claim has been issued, the court can grant a suspended order conditional on the sale completing.

    What's the difference between selling now and being repossessed?

    Selling voluntarily means you control the price, the timing and the solicitor; you avoid the county court judgment that follows a repossession; and you usually achieve a substantially better net outcome. Repossession means the lender sells (often at auction, often below market), keeps what it needs to clear the debt and its costs, pursues you for any shortfall, and the default stays on your credit file for six years. The financial gap between the two outcomes is often £20,000-£50,000 on a typical South Yorkshire property.

    Can I just hand the keys back to the lender?

    Voluntary surrender does not extinguish the debt. The lender will still sell the property, deduct its costs, and pursue you for any shortfall plus accrued interest and fees. A repossession default is recorded on your credit file for six years. In almost every case, a controlled sale (open market or cash buyer) is materially better for the borrower than handing the keys back. The "clean break" feeling of handing the keys back is, in practice, almost always followed by a debt collection letter.

    How long does a repossession or mortgage default stay on my credit file?

    Six years from the date the default or county court judgment is recorded. Formal forbearance arrangements (payment plans, partial holidays, capitalisation of arrears) are typically reported as a payment arrangement marker that lasts the duration of the arrangement plus six years. Mortgage Charter measures (term extension, interest-only switch) are not reported and have no credit-file impact.

    What if my mortgage is bigger than the house is worth, negative equity?

    You can still sell, but only with the lender's consent. The lender will require a current valuation, evidence of marketing, a binding offer, and an undertaking from you regarding the shortfall. The shortfall remains your debt and may be pursued for up to twelve years under the Limitation Act 1980. Negative equity does not make a sale impossible, it just adds 2-4 weeks for lender consent. Get free advice from StepChange or a debt solicitor before agreeing terms.

    How fast can a cash buyer in South Yorkshire complete?

    A typical South Yorkshire Property Buyers cash completion runs 2-4 weeks once a solicitor is instructed. Some cases close in 7-10 days. Cases involving negative equity (lender consent-to-sell) or unredeemed second charges typically add 2-4 weeks. The offer is guaranteed for 14 days from when it is made, subject only to material changes discovered during conveyancing (genuine title or structural surprises). Our offers are typically 80-85% of open market value.

    Where can I get free legal advice if my lender has begun court action?

    The Housing Loss Prevention Advice Service (HLPAS) provides free legal advice from the moment you receive a written possession notice, and free representation by a duty solicitor at every county court possession hearing in England and Wales. No means test for the in-court element. Call Civil Legal Advice on 0345 345 4345, or Shelter on 0808 800 4444 for the housing emergency line. Shelter Legal's defences to mortgage arrears possession claims page is the best free legal-process resource for borrowers facing court action.

    Speak to us once you've had the free advice

    If you've made the free calls, explored Charter forbearance, and the position is still not workable, a cash sale on your own terms is the right answer. We give you a written cash offer within 24 hours, guaranteed for 14 days, with no fees and your own solicitor if you want one. We will not pressure you; we will not be offended if you take the offer to a free advisor before deciding.

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