Remortgaging with mortgage arrears can be possible, but it is one of the harder credit issues to place, because missed mortgage payments are exactly what a new mortgage lender wants to avoid. Arrears cleared some years ago, with a clean record since, may still leave a reasonable range of options. If you are behind on your mortgage right now, options are usually much narrower, and the best first step is often talking to your current lender rather than applying elsewhere.
If you are struggling now, free and confidential help is available from MoneyHelper, StepChange and National Debtline. This page covers how arrears are recorded, how current and past arrears differ, and the alternatives to a remortgage that may be open to you.
On this page
In short
- Mortgage lenders usually treat missed mortgage payments more seriously than other credit issues.
- Arrears that have been cleared are viewed very differently from arrears you have now.
- Your current lender must treat you fairly and consider options such as a payment arrangement.
- Free, confidential debt advice is available if you are finding payments hard.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
Why do mortgage lenders take arrears so seriously?
Most credit issues tell a lender something indirect about how you handle money. Mortgage arrears tell them directly how you have handled a mortgage. That is why arrears on a mortgage or secured loan are usually weighed more heavily than a missed card payment or a phone bill default, and why some lenders will not consider recent mortgage arrears at all.
Each missed mortgage payment is recorded on your credit file and stays for 6 years from when it was recorded. The file shows how far behind you were each month, so a lender can see whether you missed one payment and caught up, or fell steadily further behind. For late payments on other accounts, see remortgaging with missed payments.
Can you remortgage while you are currently in arrears?
It is difficult, but not always impossible. Some specialist lenders may consider an application with current arrears, typically where there is plenty of equity and the arrears would be cleared as part of the remortgage. You would still need to show the new payment is affordable, which can be hard if the arrears came from a fall in income. Clearing arrears this way also adds them to a larger, longer debt.
| Your situation | What it usually means | Options that may be worth discussing |
|---|---|---|
| Behind now, not yet in contact with your lender | The most limited position for a new application | Contacting your lender and getting free debt advice first |
| Behind now, with an agreed payment arrangement | Still limited, but the arrangement shows you are dealing with it | Keeping to the arrangement and asking your lender about a product transfer |
| Arrears cleared in the last 12 months | Recent, so fewer lenders may consider it | A specialist remortgage, a product transfer, or waiting to build a clean record |
| Arrears cleared more than 2 years ago, clean since | Often viewed more favourably, especially with good equity | A wider search, depending on the rest of your file |
General illustration only. The time bands are examples, not lender rules, and each lender sets its own criteria.
Why talk to your current lender first?
If you are in arrears, or can see them coming, contact your lender as early as you can. Lenders must treat customers in payment difficulty fairly and consider forbearance, which means ways of making the situation more manageable. Depending on your circumstances, this may include:
- an arrangement to clear the arrears gradually alongside your usual payment
- extending the mortgage term to lower the monthly payment
- switching some or all of the mortgage to interest-only for a period
- a temporary reduction or deferral of payments
- adding the arrears to the mortgage balance in some cases
Some of these options can mean paying more interest overall, so ask your lender to explain them in writing. Repossession is meant to be a last resort, and lenders must follow set steps before going to court.
Can a product transfer help if you have had arrears?
If your fixed deal is ending, ask your current lender about a product transfer. Where you are not borrowing more, FCA rules allow lenders to switch existing customers without a full affordability assessment, which can help if your credit file or income has changed. A lender can still decide what it offers someone in arrears, so the choice may be limited until payments are back on track.
A product transfer can keep you off the standard variable rate, which is usually higher, but it does not raise extra money. If you need to borrow more, a further advance from your current lender or a second charge mortgage may be alternatives, each with its own costs and risks.
Should you consolidate debts into your mortgage if you have arrears?
When money is tight, it can be tempting to release equity to pay off cards and loans as well as the arrears. This can lower monthly outgoings, but it secures those debts on your home, a longer term can mean paying more in total, and falling behind again would put more at stake. Regulated advisers must consider whether consolidating debts into a mortgage is appropriate for you. Our debt consolidation remortgage page and our guide on whether you can remortgage to consolidate debt explain the trade-offs.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. If you are already behind, speak to a free debt adviser before taking on new secured borrowing.
What other credit issues often come with mortgage arrears?
Arrears rarely happen in isolation. If the mortgage fell far enough behind, the lender may have registered a default, which our page on remortgaging with defaults covers. Some people in difficulty also set up a debt management plan for their other debts. A DMP usually covers unsecured debts only, so mortgage payments carry on alongside it.
For a closer look at timings, see our guide to whether you can remortgage with mortgage arrears, and read how LTV affects a bad credit remortgage to see why equity matters so much in arrears cases.
What may affect your remortgage options
With mortgage arrears, timing and what has happened since usually count for the most.
| Factor | Why it matters |
|---|---|
| Age of the arrears | How long ago you were last behind is usually the key question. Options tend to widen the longer your mortgage record has been clean. |
| Size of the arrears | Lenders look at how many monthly payments you were behind, not just the sum owed. One payment behind is viewed very differently from three or more. |
| Cleared or outstanding | Arrears you have fully cleared are a different position from arrears still owed. If you are on a payment arrangement, keeping to it matters. |
| Number of occasions | A single period of arrears with a clear cause, such as illness or redundancy, may be easier to explain than repeated arrears over several years. |
| Mortgage payment history since | Your payments since the arrears are the strongest evidence you can offer. Every month paid in full and on time adds to your record. |
| Property value | A current valuation sets your equity, which can be one of the biggest factors in whether a lender will consider an arrears case. |
| Outstanding mortgage balance | Arrears added to the balance increase what you owe and push up your loan to value. |
| LTV and equity | A lower LTV generally widens options, and lenders who consider past arrears may want more equity than for a clean credit file. |
| Income and affordability | Lenders need to see that the cause of the arrears has passed and that the new payment is affordable after a stress test. |
| Employment type | A change such as a move into self-employment can explain arrears, but lenders will want evidence that income has since settled. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- When the arrears started, and when or whether they were cleared
- The most you were behind, in number of monthly payments
- Details of any payment arrangement or forbearance agreed with your lender
- Recent mortgage statements showing your payment history
- What caused the arrears and what has changed since
- Your mortgage balance, monthly payment and deal end date
- An estimate of your property’s value
- Proof of your current income and regular outgoings
Specific mortgage arrears situations
More detail for particular circumstances.
Remortgaging after a previous repossession
What a previous repossession may still show on your credit file, how a shortfall debt can continue to affect you, and how time and a clean record since both matter.
Remortgaging after your lender capitalised your arrears
What it means when a lender capitalises mortgage arrears, how it affects your balance and loan to value, and what to check before you remortgage.
Remortgaging to clear mortgage arrears
Whether remortgaging can pay off mortgage arrears, the risks of adding arrears to a larger loan, and the alternatives worth exploring with your lender first.
Remortgaging after clearing mortgage arrears
How cleared mortgage arrears show on your credit file, why the record does not disappear immediately, and what usually matters most once you are back on track.
Remortgaging when you are currently in mortgage arrears
What is realistic when you are behind on your mortgage right now, why your current lender should be your first call, and where to get free debt help.
Remortgaging with mortgage arrears from over 2 years ago
How mortgage arrears from over 2 years ago tend to be viewed, what changes as the record ages, and how to use a longer clean run to your advantage.
Remortgaging while on a mortgage payment arrangement
How an agreed mortgage payment arrangement is usually recorded, why keeping to it matters, and what tends to happen once the arrangement ends.
Remortgaging after a mortgage payment holiday
How an agreed mortgage payment holiday differs from missed payments, how it may show on your credit file, and what to check before you remortgage.
Remortgaging with arrears on a secured loan
How arrears on a second charge or secured loan differ from main mortgage arrears, why they are still treated seriously, and what to check before you remortgage.
Frequently asked questions
Do arrears on a secured loan count as mortgage arrears?
Many lenders treat missed payments on a secured loan or second charge mortgage in a similar way to first mortgage arrears, because both are secured on your home. They stay on your credit file for 6 years from when they were recorded. If you have arrears on both, tell an adviser about each so the full picture is clear from the start.
Should I stop paying other debts to keep up my mortgage?
Debt charities treat your mortgage as a priority debt, because falling behind can put your home at risk. Stopping payments to other creditors can lead to defaults and further credit problems, though, so get free advice before changing what you pay. StepChange and National Debtline can help you build a budget and deal with creditors.
Is a payment arrangement better than missed payments on my credit file?
An arrangement shows you contacted your lender and agreed a plan, and it is often recorded as an arrangement to pay rather than a run of missed payments. It still signals difficulty, and lenders will ask about it. Keeping to an agreed arrangement is generally viewed more positively than payments simply going unpaid.
What if my lender has started repossession action?
Get free advice straight away from National Debtline, StepChange or MoneyHelper. Keep talking to your lender and respond to every letter and court paper, as there may still be options such as a payment plan the court could consider. A remortgage is unlikely to be quick at this stage, so it should not be your only plan.
Do arrears on a mortgage I no longer have still count?
Yes. Arrears on a mortgage you have since repaid, for example on a home you sold, stay on your credit file for 6 years from when they were recorded, and lenders will usually treat them as mortgage arrears. How long ago they happened, and your record on your current mortgage since, are likely to matter most.