What happens if I stop paying my mortgage in the UK? (Can’t pay mortgage options)


If you are pondering the question “what happens if I stop paying my mortgage?” you could find yourself in difficulties if you do so. If you’re in financial strife, don’t stop paying your mortgage if you can help it, as there are alternative solutions.

What happens if I stop paying my mortgage - Can't pay mortgage options

If you stop paying your mortgage payments this will significantly affect your credit report. However, the bigger problem is that by missing mortgage payments this could end in you having your home repossessed, although in the UK the repossession process doesn’t start until after three missed mortgage payments.

If your credit report has been affected by missed mortgage payments, this will make obtaining future credit very difficult in the short term. Which not only includes getting home loans, but it will become extremely challenging to obtain any form of credit.

What happens if I stop paying my mortgage in more detail?

It’s only at the point when you’re struggling to pay your mortgage that you realise it’s not the bricks and mortar but the mortgage that keeps the roof over your head.

There are a number of reasons why you may be needing to stop paying your mortgage. This could include the loss of a job, health reasons or perhaps your business has gone bust!

More Reading: Does one late mortgage payment affect credit score (When is late, late?)

If you are wondering what happens if you stop paying your mortgage, there are two major impacts to be aware of.

  1. The risk of your home being repossessed.
  2. Makes it difficult to obtain future credit in the short term.

Let’s take a look at these in more detail.

1. The risk of your home being repossessed

If you’ve already missed a mortgage payment, then you are currently ‘in arrears‘ on your mortgage. It is at this point that the mortgage repossession process begins with your mortgage lender.

More Reading: Home repossession process in The UK (When is it too late to stop it?)

However, if you’ve not yet missed a mortgage payment, try wherever possible to pay this if you can. Before you miss a payment, speak to your lender straight away, as they may be able to help you.

However, if you have already missed a mortgage payment (or two), and if you’ve not already spoken to your mortgage lender, do it right away. That means not delaying and doing it NOW!

There are many options to avoid being repossessed, which can be found in the follow article:

More Reading: How can I stop my house being repossessed? (12 Options To Stop it)

Will the government help with your mortgage payments?

The government won’t help you with your mortgage payments if you’re having difficulty paying them. But, you may be able to get Support for Mortgage Interest (SMI).

This will pay your mortgage interest for you, but you’ll have to find the rest of the mortgage payment yourself. If you’re not able to do this, you may need to speak with your mortgage lender to see if you can switch to an interest-only mortgage temporarily.

If you’re eligible for the SMI scheme, the Government steps in and makes interest payments. This is on the first £200,000 of your outstanding mortgage for the period you can’t afford them. However, this is reduced to £100,000 if you’re getting Pension Credit.

The current interest rate for SMI is 2.61%. But this is subject to change each time the Bank of England average mortgage rate moves by at least 0.5% away from the current SMI rate. So the rate you pay will be affected either up or down if bank rates change.

There are rules around who can claim SMI, so you need to check your eligibility.

More Reading: What to do if you bought a house you can’t afford (7 top tips)

2. Makes it difficult to obtain future credit in the short term

No matter how many mortgage payments are missed, your credit report will be badly affected. But if you end up being repossessed, this will stay on your credit report for seven years.

More Reading: If my house is repossessed can I get another mortgage

This will make obtaining future credit very difficult in the short term. Which doesn’t only include getting a home loan, but it will also become extremely challenging to obtain any form of credit. This includes credit cards and personal bank loans.

More Reading: How long does a house repossession stay on your credit report UK

I hope this article has helped on what happens if I stop paying my mortgage

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Also, if you have any questions, please feel free to comment below too. Alternatively, if you need more help, please feel free to contact us on our contact us page here. Or join the discussion and ask your question in the property forum.

More Reading: How Can I Legally Get Out Of My Mortgage? (7 Options That work)

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