Six things you must do NOW if you’re struggling to pay your mortgage and extra help that could be hidden in small print
IF you're struggling to make your monthly mortgage payments, there are steps that you can take to help you get your head above water.
The Bank of England held interest rates at 5.25% earlier this month for the second time in a row.
Many lenders have started to reduce their rates as a result, easing the squeeze for millions of homeowners.
Some experts are even predicting that rates could drop below 4% by the end of this year.
While this may bring a sigh of relief for many, interest rates are still at their highest level since March 2008.
The number of mortgage arrears has jumped as cost of living pressures and higher rates on home loans bite.
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Across the UK, 87,930 homeowner mortgages were in arrears in the third quarter of this year, 7% more than the previous quarter.
UK Finance, than banking industry body, said mortgage arrears are still running at less than half the levels seen in 2009.
Dozens of mortgage lenders representing more than 90% of the market have signed up to the Government’s mortgage charter.
This means they have promised additional support for borrowers.
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It includes giving customers approaching the end of a fixed-rate mortgage the chance to lock in a deal and request a better like-for-like deal if rates change up to six months ahead.
Plus they've guarantees no repossession within 12 months of a first missed payment.
But if you're still struggling to pay, Nicholas Mendes, technical manager at broker firm John Charcol, explains what you should do.
Contact your lender
It's best to contact your lender as soon as possible if you are struggling.
This can be as simple as picking up the phone to your bank or building society, or visiting your local branch.
It's best to do this before you know you won't be able to meet your monthly repayments, and not after
That's because going into mortgage arrears is very serious.
If you can't pay back the debt that you borrowed to buy your house, then ultimately the lender who lent you that money has the right to repossess your property in order to recoup its cash.
But they can't do this unless all reasonable attempts to resolve the situation have failed, according to the Financial Conduct Authority.
Nick said: "Being open with your lender early on will allow them to propose a solution to support and avoid risk and costs spiralling out of control.
"The lender will typically look at changing the amount for a short period, a mortgage holiday, switching to an interest-only mortgage temporarily, or even extended the term to lower monthly payments"
Mortgage holidays
A mortgage or payment holiday allows you to take a short break from having to pay towards your mortgage.
"They've been around for a while and have been a feature offered by a number of mortgage lenders," Nick said.
"They come with criteria concerning factors such as your mortgage contract and your financial circumstances."
If you’re looking to arrange a payment holiday through your lender, you must speak with them first.
They’ll be able to give you information about their policy and the criteria you must meet.
The length of your payment holiday will depend on the lender.
A typical short break can range between one to three months but can also extend to 12 months.
To qualify, you’ll often need to prove that you’ve made payments on time for a minimum period set by your lender.
Your ability to take a mortgage holiday will depend on the size of your mortgage and the current value of your home.
Some lenders will only allow a mortgage holiday if the LTV (loan-to-value) of your remaining mortgage is lower than 80%.
It's important to know that payment breaks are usually recorded on your credit files.
This could future applications for borrowing, having an impact on how much interest you pay, how much you can borrow and your chances to remortgage.
Set a budget
After you've talked to your lender, look at how you can minimise your monthly outgoings.
It means you'll be able to free up money to pay for your mortgage.
Nick said: "Review your income and expenditure and prioritise what is important.
"Speak with any other secured and unsecured lenders you have been borrowing with, as each one will be able to support you in their respective ways."
Make a budget to track your outgoings and income.
Ready-made budget planners, like this one from Money Helper, can get you kick-started.
Check your mortgage payment protection
Mortgage payment protection is a type of insurance.
It pays your mortgage repayments for up to 12 months if you become seriously ill, or lose your job.
You will need to have mortgage payment protection in place in order to make a claim, it isn't something you can do retrospectively.
So if your circumstances have changed, Nick says its well worth checking your policy to see if you're covered as the answer could be lying in the small print.
Mortgage protection insurance covers mortgage repayments, and if you need to claim, the payments come directly to you, rather than the lender.
The payout amount will depend on the type of mortgage protection cover you chose.
But providers do often set maximum limits of between £1,500 and £2,000 a month, according to comparethemarket.
And if your claim is successful, you may have to wait up to 180 days for it to be paid out.
Get advice
Falling behind on your mortgage repayments can be vary scary.
But you can get free help and guidance over what steps you should take back control of your finances.
is available on 0808 800 9060.
It is a free and impartial service, and it can help you come up with a plan to getting on top of your debt including which payments to prioritise and how to reduce your living costs.
You can contact on 0808 808 4000.
An adviser will ask you about your income and spending, so try and have as much information to hand as possible when you call.
Self-employed workers can also get help through .
Know your rights
It also helps to have a rough idea of the help that might be on offer to you.
As part of the mortgage charter, lenders can now change the term of your mortgage deal temporarily to bring your monthly payments down for up to six months.
You can also switch to interest-only repayments for six months, which can also reduce your monthly bill.
You won't have to share any more financial information about your current circumstances for lenders to agree to the change.
It also won't affect your credit score.
But it's worth bearing in mind that although this could help in the short term by lowering monthly repayments, it could mean you pay back more in the long term.
If anyone using the temporary measures decides to go back to their original plan within six months they are free to do so.
A number of other measures also came into affect earlier this year.
Customers approaching the end of a fixed-rate deal have the chance to lock in a deal up to six months ahead.
Some banks previously offered this before the change, and others for a shorter time.
Now borrowers can be sure that their bank will offer this time-frame automatically.
Homeowners can request a better deal with their lender right up until their new term starts, if one is available, though, meaning they won't miss out if rates later go down.
Any homeowner can also approach their lender for advice on repayments without impacting their credit score.
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To take advantage of any of these changes, homeowners should speak to their lender.
You'll need to be up to date with your repayments to be eligible, as the help does not apply to those who have already fallen behind on payments.
You can also join our new Sun Money to share stories and tips and engage with the consumer team and other group members.