Drivers of Mortgage Arrears

The key factors that contribute to mortgage arrears range from job loss to rising interest rates, with homeowners and landlords struggling to keep up with their mortgage payments.

Job Loss

This is a primary factor for many individuals struggling to meet their mortgage payments

Rising interest rates

Adding to the financial burden for homeowners and landlords

Economic downturn 

Fluctuations in the economy continue to impact individuals’ ability to meet their mortgage obligations.

Impact on Landlords unable to raise rents

As the arrears for landlords continue, it becomes even more difficult to cover mortgage payments, taxes, repair costs and other expenses associated with being a landlord. The restrictions on rent raises have caused more pressure within the BTL sector, as landlords are unable to raise their rents to even cover their mortgage payments.

Strategies to address mortgage arrears

Financial Planning

Effective financial planning can help prevent or lessen mortgage arrears

Communication with lenders

Open and honest communication with your mortgage lenders may well give you options or alternative payment schedules, prior to repossession action. Seek assistance, prior to any irreversible action being taken. They might offer;

• Increasing the term of your mortgage, reducing your monthly payment
• A switch to interest-only payments if you are on a repayment mortgage basis
• A switch to interest-only and part repayment, again if you are on full repayment basis
• A temporary freeze on payments for a few months, if available
• A temporary reduction in payments for a number of months, if available

If you are taking out a new BTL mortgage, there are some lenders who offer a guarantee of ‘no repossession’ within 12 months of your first payment being missed.

Government Backed Support

Find out about the various government support programs that allow landlords and homeowners facing mortgage arrears access to guidance on how to access and use these valuable resources.

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