I'm struggling to pay my rent or mortgage
If you are not able to pay your rent or mortgage, talk to your landlord or mortgage lender as soon as possible. Whether the problem is due to a change of circumstances, a budgeting problem, redundancy or a cut in your benefits, below are some simple steps you can take to help get yourself back in control and avoid eviction or repossession.
Talk to your Landlord or Mortgage Lender
When you speak to your landlord, explain why you are going to be late with the rent and ask for some extra time. Be clear about what you are doing to address the problem to help ensure it will not happen again.
When you speak to your mortgage lender, they will be keen to help and will talk through your options. They must make reasonable attempts to reach an agreement with you, including considering whether to change the way you make payments and when you make them.
If you fall into mortgage arrears, within 15 days your lender must:
- list all the payments which you have missed
- tell you the total sum of your arrears
- tell you the amount of any charges incurred because of missing any payments
- tell you the exact amount outstanding under your mortgage
- give you a reasonable time to make good any shortfall in payments
Your lender must not seek repossession unless all other reasonable attempts to resolve the situation have failed, and they must give you reasonable notice before taking that action. Offer to pay back what you can afford when you discuss your options with your lender - continuing to pay back some money is better than paying nothing and will help reduce your arrears.
Identify the problem and make a plan
In some cases, it may be that your income or expenses have suddenly changed for the worse, e.g. you have lost your job or your partner has moved out and stopped contributing to the rent or mortgage. In other cases,it may simply be that you are living beyond your means. Either way, you will need a plan. Being repeatedly late with your rent or mortgage could lead to eviction and a bad reference from your landlord if you rent, or repossession of your home if you have a mortgage.
Using an income and expenditure calculator (external website) will help you to work out the shortfall between your monthly income and your expenses. Once you have done this, you can look at ways to cut back or boost your monthly income to close the gap.
Ways you can cut back
Cutting back can be difficult, but you will need to ask yourself the following questions:
- Can you ditch any of your regular monthly expenses or cut back on any luxuries?
- Are you on the cheapest tariff for all your monthly bills?
- If you have credit card debt, can you switch to a 0% credit card and save yourself some interest payments?
Boosting your Income
If your circumstances have changed and your income has fallen as a result, you may be able to claim benefits to help you pay your rent, such as Housing Benefit or Council Tax Reduction. If your benefits have been cut as a result of the benefit cap or because you are classed as 'under-occupying' your home – you can apply for Discretionary Housing Payments. Discretionary Housing Payments cannot assist homeowners.