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If you've fallen behind on your mortgage in the past, you might worry that you'll never be able to move home or get a better deal again. But we're here to reassure you that this is rarely the case.
At Echo, we often speak to people who've been through a difficult patch with their mortgage payments. Whether it was a job loss, an illness, a separation or the sharp rate rises of recent years, mortgage arrears can happen to anyone, and getting back on track is entirely possible.
In this guide, we'll explain how lenders view mortgage arrears, how long they stay on your credit file, what deposit you might need and which lenders could help. If you're struggling with your payments right now, we'll also cover the support you're entitled to, and where to get free help.
Can you get a mortgage with a history of arrears?
Yes, you can. Mortgage arrears are viewed as one of the more serious types of adverse credit, because they relate directly to the type of borrowing you're applying for. However, they're far from the end of the road.
Timing is the key factor. Once your arrears have been cleared and you've kept up with your payments for a while, some specialist lenders will consider you. The longer ago your arrears were, and the cleaner your record since, the more lenders become available to you.
Specialist lenders who use human underwriters will usually look at:
How long ago the arrears were: Most lenders focus on the last 12 to 36 months. Arrears from four years ago carry far less weight than arrears from last year
How far behind you fell: Missing one payment is very different to being three or six months in arrears
Whether they've been cleared: Lenders want to see that you're fully back up to date, not just making reduced payments
Your track record since: A run of on-time payments, ideally at least six to 12 months, shows lenders you're back in control
The reason behind them: A one-off life event, such as redundancy, illness or a relationship breakdown, is viewed more sympathetically than ongoing overspending
Any other credit issues: Arrears on their own are easier to place than arrears alongside defaults or CCJs
What if you're still in arrears?
It's very difficult. Very few lenders will offer a new mortgage while you have outstanding arrears on your current one. Your first priority should be to agree a plan with your existing lender to clear them.
If you're close to clearing your arrears, or you've recently caught up, it's still worth getting in touch for a chat about what might be possible and when.
Check if you're eligible for a mortgage after arrears
How mortgage arrears affect your credit file
When you miss a mortgage payment, your lender reports it to the credit reference agencies. Each month you're behind is shown as a status marker on your credit file: a '1' for one payment behind, a '2' for two, and so on.
These markers stay on your credit file for six years from the date they were recorded, even after you've caught up. After that, they drop off automatically.
If you remain in serious arrears for a long time, your lender may also register a default, or eventually take court action. Unlike most other debts, mortgages are often not defaulted after three to six months, because the lender has the security of your home.
Mortgage arrears vs late payments: what's the difference?
A late payment is any payment made after the due date, on any type of credit. Mortgage arrears specifically mean you owe your lender one or more missed mortgage payments. Lenders treat mortgage and secured loan arrears more seriously than late payments on things like phones, utilities or credit cards.
How long after mortgage arrears can you get a mortgage?
The more time that's passed since your arrears were cleared, the easier it becomes, as a greater number of lenders will open their doors to you.
The table below gives a general idea of how lenders tend to view mortgage arrears at each stage:
The mortgage arrears timeline
Time since arrears cleared | Lenders likely to consider you | How lenders view your application |
Less than 12 months | A small number of specialist lenders | Possible, but options are limited. You'll rely on specialist adverse credit lenders who review cases individually, and will usually need at least six months of on-time payments since catching up |
12 to 24 months | Most specialist lenders | A real turning point. Many specialist lenders accept mortgage arrears once they're more than 12 months old and you've been fully up to date since |
2 to 3 years | Specialist and near-prime lenders | A much wider choice. If your record has been clean since, near-prime lenders and some building societies may consider you on more competitive rates |
3 to 6 years | Many high street lenders | Older, cleared arrears with a clean recent history are increasingly acceptable to mainstream lenders, although some will still ask about them |
6+ years | The whole market | A clean slate. The arrears will have dropped off your credit file completely |
Please note: This is a general guide only. Lending criteria change frequently, and how far behind you fell, and whether you have any other credit issues, will affect which lenders can help.
How much deposit do you need?
Not always as much as you might fear. The deposit you'll need depends mainly on how recent your arrears were and how severe they were.
Recent arrears (cleared within the last 12 to 24 months): Expect to need a deposit, or equity if you're remortgaging, of around 15% to 25%
Older arrears (2 to 3 years ago): Many specialist lenders will consider 10% to 15%
Arrears more than 3 years old: With a clean record since, you may be able to access 5% to 10% deposit mortgages
If you're remortgaging, the equity you hold in your property works in the same way as a deposit. The more equity you have, the more lenders will be comfortable offering you a deal.
Mortgage rates after arrears
It's true that a mortgage after recent arrears will usually come with a higher interest rate than a standard high street deal. Specialist lenders price in the extra risk they're taking on.
However, we always encourage our clients to look at the bigger picture. Taking a shorter fixed-rate mortgage of two or three years, and keeping every payment on time, actively rebuilds your credit file. By the time the deal ends, your arrears will be older, and we can help you remortgage onto a much more competitive rate.
"Falling behind on your mortgage is one of the most stressful things anyone can go through, and we see how much people blame themselves for it. But lenders understand that life happens. What they really want to see is that you've got back on track and stayed there. Once you've built up a good run of payments, we can usually find a lender who'll judge you on where you are now, not where you were."
Neil Mulhearn Which lenders accept mortgage arrears?
Most high street banks will decline an application with recent mortgage arrears, because their automated credit scoring flags them straight away. Fortunately, we have access to specialist lenders who use human underwriters to look at the full story behind your arrears, and how you've managed your money since.
Here's a general overview of how each type of lender tends to approach mortgage arrears:
Lender type | Typical stance on mortgage arrears | Typical deposit required | Key lending criteria & approach |
Specialist lenders (e.g. Pepper Money, Kensington) | Recent, cleared arrears | 15% – 25% | Use human underwriters and tiered criteria based on how recent your arrears were. For example, Pepper Money requires missed mortgage payments to be at least 12 months old, with at least six months of up-to-date payments since |
Near-prime lenders and some building societies | Older arrears with a clean record since | 10% – 15% | A middle ground. Often suited to applicants whose arrears are two to three years old and who have no other recent credit issues |
High street banks (e.g. Halifax, Nationwide) | Older, minor arrears only | 5% – 10% | Generally want any mortgage arrears to be several years old and fully cleared, with a clean credit record since. Recent arrears are likely to be declined automatically |
Please note: Lending criteria change constantly. These are correct at the time of writing, but always check with your broker before applying.
Remortgaging with mortgage arrears
If you're coming to the end of a fixed-rate deal, you have two main routes:
A product transfer with your current lender: If you're now up to date with your payments, many lenders will let you switch to a new deal without a fresh credit check or affordability assessment. This is often the simplest option
A remortgage to a new lender: This means a full credit check, so your arrears will be taken into account. A specialist lender may still offer a better deal, especially if your arrears are older or you have good equity
It's worth comparing both. A broker can check what your current lender is offering and whether a specialist could beat it.
Joint mortgages when one of you has had arrears
If you had arrears on a previous joint mortgage, they'll usually show on both of your credit files. If the arrears are on only one applicant's file, a partner with a clean credit history and stable income can strengthen your application and improve affordability. Lenders will still take the arrears into account, so you'll typically need a specialist or near-prime lender.
How to get a mortgage after arrears
If your arrears are behind you and you're ready to buy or remortgage, here's how to prepare your application:
- Clear your arrears in full: Lenders want to see that you're completely back up to date, not on a reduced payment arrangement
- Build a clean track record: Aim for at least six to 12 months of on-time payments across your mortgage and all other credit before you apply
- Check your credit report with all three agencies: Lenders may use Experian, Equifax or TransUnion. Make sure the arrears are recorded accurately and that they show as cleared
- Add a Notice of Correction if relevant: If your arrears were caused by something like illness or bereavement, you can add a short statement to your credit file explaining what happened
- Avoid new credit: Don't take out new loans, credit cards or buy now, pay later products before you apply
- Don't apply directly to the high street: A decline means a hard search on your credit file, which can put off the next lender. A broker can check your eligibility first
- Speak to a specialist broker: We'll match you with the lenders whose criteria fit your circumstances
Struggling with your mortgage payments now? Get help early
If you're finding it hard to keep up with your mortgage, contact your lender as soon as possible, ideally before you miss a payment. The earlier you speak to them, the more options you'll have.
Under the Financial Conduct Authority's (FCA) rules, lenders must treat you fairly if you're in financial difficulty. They should consider a range of options before ever thinking about repossession, which must always be a last resort. Depending on your circumstances, these could include:
A payment arrangement to clear your arrears over time
Switching to interest-only payments temporarily
Extending your mortgage term to reduce your monthly payments
Adding the arrears to your mortgage balance (capitalisation)
A reduced payment or payment deferral for a short period
Help with selling your home voluntarily if keeping it isn't affordable
Can mortgage protection insurance help?
If you don't already have arrears, income protection or mortgage payment protection insurance can cover some or all of your mortgage payments if you can't work due to illness, injury or (with some policies) unemployment. Policies vary widely, so it's important to check what's covered and any waiting periods.
Our income protection advisers can talk you through your options.
Mortgage Charter support
If you're up to date with your payments but worried about the future, the Mortgage Charter, signed by lenders covering around 90% of the market, lets you switch to interest-only for up to six months, or extend your term with the option to switch back within six months. These options don't require a new affordability check and won't affect your credit score. Charter lenders have also committed not to repossess a home within 12 months of the first missed payment, except in exceptional circumstances.
These measures can provide valuable breathing space. However, paying interest-only or extending your term will usually increase the total interest you pay, so it's worth getting advice first.
Support for Mortgage Interest (SMI)
If you receive certain benefits, such as Universal Credit or Pension Credit, you may be able to get a Support for Mortgage Interest loan from the Department for Work and Pensions. It helps towards the interest on up to £200,000 of your mortgage (£100,000 if you get Pension Credit). It's a loan, not a grant: it's secured against your home, it builds up interest, and it's usually repaid when you sell or transfer ownership.
Free debt advice
You don't have to deal with arrears alone. Free, confidential debt advice is available from organisations including:
National Debtline
Get specialist mortgage advice after arrears
At Echo Finance, we understand that financial difficulty can happen to anyone. We don't judge customers who've had mortgage arrears in the past, because we know how quickly circumstances can change.
We specialise in helping people find mortgages after arrears, including those who've been turned down elsewhere. We know which lenders are sympathetic to your situation, and we'll take the time to listen to your story so we can present it in the best possible light.
Ready to move forward? Speak to a mortgage arrears expert today. There's no judgement here, and our initial chats are completely free.
FAQs
Yes. Because a mortgage is the same type of borrowing you're applying for, lenders treat arrears on a mortgage or secured loan more seriously than missed payments on phones, utilities or credit cards.
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