Difficulties repaying your mortgage

If you are struggling with your mortgage payments or worried that you can’t pay your mortgage, read on for more information on how we can help.  

We're here to help

There are many reasons why you might not be able to pay your mortgage. We understand how distressing it can be worrying about how you are going to pay your mortgage, now or in the future. Regardless of the causes it is always going to be a difficult time. If you’re worried about your mortgage repayments.

Whether you feel you may have payment difficulties, or you’re already fallen behind, please contact as soon as possible. Our Financial Support team is here to help. We'll talk through the options available to you, based on your individual circumstances and see how we can work together to find the best solution. 

You can contact the team using a range of methods: 

• over the phone - 0345 601 3344
• via email - thecambridge@cambridgebs.co.uk 
• via secure message - if you have online access to your Cambridge mortgage account
• or make an appointment online here

Talking to us about your financial situation won't affect your credit rating. Before agreeing any arrangements with you, we will let you know how it will be reported on your credit file. 

If you’ve missed mortgage payments and haven’t contacted us yet – the team will be in touch to discuss this with you. 

Read on below for more information on how we may be able to help ease your situation.

 

How can The Cambridge help?

We will contact you as soon as possible. The earlier difficulties are addressed, the easier they are to manage and get under control. We will only contact you by phone and at a reasonable time, between 8am and 9pm.

One of the first things we’ll do is review your current financial situation. We'll review your income and expenditure information, so it’s good to have your bank statements and payslip to hand. This can help clarify matters for us and for you, and we can then look at the options available to you.

If you have missed a payment or are behind on your mortgage, we will give you reasonable time to pay back the shortfall amount, reviewing the suitability of any arrangement agreed at regular intervals.

We will give you information so that you understand the implications of any arrangements and of not agreeing an arrangement which will include the potential impact on the overall balance and how it will be reported on your credit file.

If you tell us it will make things easier for you, we can communicate with your solicitor or a nominated third party, but they won’t be able to make decisions on your behalf.

Where you’re experiencing difficult circumstances, we’ll listen and tailor the support depending on your individual needs. More information can be found here.

 

Where can I get help

There are many places to seek free, impartial help and advice:

Money Helper - from benefit advice and budgeting tips to money and debt advice.

Business Debtline and National Debtline - for straightforward advice on what to do if you’re struggling with debt repayments.

Stepchange - for help with debt repayments and financial solutions.

Citizens Advice - for information and support on a wide range of problems you may be facing, including repossession.

Don’t worry if you would prefer to speak to us first, we can refer you directly to The Money Adviser Network for free confidential help and guidance.

 

What are my options?

Depending on your budget and how your personal circumstances are impacting you (and for how long). To help you choose the best option for your needs, our specialist team will need information about your budget and situation.

We’ll make sure information about all the options are explored, tailored to your needs and focused on what you can afford to pay. We will regularly review the suitability of the arrangement to make sure it’s still appropriate for your needs and is still providing the right outcome. 

 

Short-term payment difficulties

If you're facing temporary challenges, such as unemployment or short-term illness, we can offer support for a limited period through the options listed below:

• Change the way you make your payments, or the date you make them: it is a condition of your mortgage to make your payments monthly by Direct Debit. If this is making it difficult for you to make your payments, we can discuss your circumstances and whether adjusting your current payment date or method will help.
• Reduced payments: we can reduce or stop your payments for a short time, to help you to a point where you can start full payments again. The difference between the arrangement amount and your contractual payment will show as arrears on your account, and we’ll need to arrange for you to repay the missed payments once your situation improves. We’ll continue to charge interest so the overall cost of repaying your mortgage will be higher.
• A temporary payment of just the interest: we might be able to move you temporarily to an interest-only mortgage for a short time. This will reduce your payments but it’s important to remember that you won’t be paying back any of the original amount borrowed, so you’ll need to repay it in the future which will mean your payments increase. We’ll continue to charge interest on the mortgage so the overall cost of repaying your mortgage will be higher.

 

Longer-term payment difficulties

Where you are experiencing longer-term difficulty in paying for your mortgage, such as a relationship breakdown, a long-term illness or change in employment, we can look to support you using the below options:

• Changing your mortgage product: you could reduce your payments by changing your mortgage product. If you’re on a variable rate mortgage, you could fix your rate which would give you certainty for a set time. Remember, your mortgage might have early repayment charges (ERCs) that apply. If you choose to look at other mortgage products, we can arrange for you to speak with a Mortgage Adviser, to see if changing could help.
• A mortgage term extension: if you have a repayment (i.e. not interest-only) mortgage, spreading the repayments over a longer period of time will lower your monthly payments. However, it means that you'll have a mortgage for longer and pay more interest than originally planned. But you can always reduce your term again in the future if things improve for you.
• Changing your repayment type: we might be able to move you permanently to an interest-only mortgage for the remainder of your mortgage term. This will reduce your payments but it’s important to remember that you won’t be paying back any of the original amount borrowed, so you’ll need to meet our lending criteria to repay the full balance at the end of the term. We’ll continue to charge interest so the overall cost of repaying your mortgage will be higher. If you choose to look at switching permanently to Interest Only, we can arrange for you to speak with a Mortgage Adviser, to see if changing is suitable.

 

Mortgage is unsustainable 

Where the number of payments missed on the mortgage has become significant and/or the property is no longer affordable, our specialist team can consider your current circumstances to help decide which of the options is most suited to your needs.

• Time to sell: if you don’t expect to be able to afford the mortgage in the long term, we can give you time to sell your property and help you along that process by holding off any action. To further support, if you need help with the sale of your property, we can offer an Assisted Voluntary Sale scheme.
• Time to re-finance: if you don’t expect to be able to afford the mortgage in the long term, we can give you time to explore options to move your mortgage to a more suitable mortgage type. 
• Waiver of capital or interest: where the mortgage has become unsustainable, we’ll look to see if it’s appropriate to waive any interest or capital to help support your position.
• Handing in the keys: If you are thinking about handing your keys over to us, we can discuss this with you but you should be aware that you will be responsible for paying back any sale shortfall, if the sale of your home doesn’t raise enough to pay off the debt. Please get in touch with us and review the information below: When the sale of your home doesn’t pay off the balance of your mortgage? You should get independent legal advice before taking such action.

 

After your payment difficulties have improved:

• Paying the contractual payment only for a temporary period: we refer to this as holding the arrears position and it is considered suitable where payment difficulties have resolved, and mortgage payments can resume but your financial position may be uncertain for a short time to allow you to agree a plan to repay a payment shortfall.
• Arrears repayment arrangement: this is an arrangement with you to spread repayment of a payment shortfall over a period of time, with the aim of bringing the account payments up to date. We will consider your individual circumstances, the cause of the payment shortfall and ensure that you’re looking to repay the payment shortfall over the shortest period you can afford. We may want to go to court to secure the arrangement, but we will let you know if this is the case.
• Capitalisation: you may ask us to consider whether capitalising your arrears is possible, to treat the payment shortfall on your mortgage as if was part of the original loan amount and recalculate your payments to repay it over the remaining term of your mortgage. We will take into account your individual circumstances, the cause of the payment shortfall and that you can afford the capitalised monthly payments. The overall amount of the debt will increase, and it will cost you more to repay the mortgage, so we will firstly ensure we have considered other options for you to repay the payment shortfall more quickly and that capitalisation provides the best outcome.

We will explain how all of these arrangements work and how they may impact your credit file. You will also have time to consider the suitable options before letting us know if you want to go ahead. If we cannot offer any of the options above, we will tell you why.

Repossession is always our last resort, and we will always do what we can to avoid this.

How you can help us

1. Get in touch as soon as possible if you’re having payment difficulties or think you might in the future so we can understand what’s causing your payment difficulties, how long it’s likely to last, and what your budget situation is at the moment. 

2. Seek free independent debt advice. MoneyHelper can help with managing your finances and budgeting tips. Or you can complete your own Income and Expenditure summary using the form here.

3. If you have other debts, such as loans and credit cards, contact your lenders to see what help they can offer and the consequences of these.

4. Update everyone named on or guaranteeing the mortgage account with what is happening. Remember, if you bought your home with other borrowers, you're all responsible for all the money borrowed. This is true even if you only pay part of the mortgage.

5. Keep to the arrangement we agree with you. If there is a change in your circumstances which may affect this, please let us know as soon as possible. If you do not make the agreed payments, we may have to start court proceedings to claim any money you owe us, or to repossess your property.

6. Check here to see whether you're applicable for any state benefits or tax credits which could help to increase your income.

7. Check whether you have any insurance policies that could help with your repayments.

8. Tell us if you move to a new address.

9. You may want to talk to a professional adviser, such as a debt counsellor or a solicitor. 

How will this impact my credit file?

Getting in touch with us to find out your options doesn’t mean we make a note on your credit file. An agreed payment arrangement with us will be reported on your credit file and will show creditors you’re working with us to reach a solution. Missed payments where there is no arrangement in place with us will be reported on your credit file and the default in payments will remain on your credit file for six years. This will affect your credit rating and you will find it harder to borrow money in the future.

Costs and charges

We aim to be clear about potential costs and charges and the typical charges are detailed in our Mortgage Tariff of Charges leaflet. 

If you are behind with your mortgage payments, we may charge you for reasonable administrative and legal costs. Once your payment shortfall reaches a certain stage, we will write to you quarterly to let you know the position and any costs that have been charged because of the arrears.

If you don’t keep in touch with us, we may use the services of a field agent to ensure that you have received our correspondence and that your property is secure. Any costs incurred doing this will be passed to you. We will always tell you the amount you will have to pay.

What happens if we can’t find a solution?

Remember, it’s never too late to contact us to discuss your mortgage and your options. We’ll only start legal action if a solution cannot be reached between us.

Starting court proceedings does not necessarily mean that we will repossess your home, we will keep trying to solve the problem with you – repossession is a last resort.

If we have told you we’ve already instructed our solicitors, you can access advice from the Housing Loss Prevention Advice Service (HLPAS) here. HLPAS is the main source of legal aid for possession cases and allows access to legal advice in relation to your mortgage debt, housing, debt or welfare benefits, from the point there is a risk of possession proceedings starting.

If court proceedings do take place, we strongly recommend that you seek independent debt advice and attend any court hearings.

If repossession is our only option, we will give you advice about contacting your local authority to see if they can find you somewhere else to live.

• If we repossess your property, we’ll commit to the following:
• Sell it as soon as possible for the best price
• Give you reasonable time to take any of your possessions that remain in the property
• Use the money raised from selling your home to pay your mortgage and any other debts secured on the property
• Pay you any remaining money once the debts have all been repaid

When the sale of your home does not pay off the balance of your mortgage

If there is not enough money from the sale of your home to repay the whole mortgage, we will be in touch to discuss how you’ll repay the shortfall amount. This is also known as shortfall debt.

If there is indemnity insurance and The Cambridge makes a claim to cover any shortfall, the insurer has the right to ask you to pay back any monies paid to us. We may instead take action to recover the money you owe on the insurer's behalf at the same time as claiming back from you any loss which was not covered by indemnity insurance.

We will contact you within six years of selling your property (five years in Scotland) to arrange for you to pay back what you still owe.

In the event of a shortfall debt, it is also important to be aware of the following:

• We will take account of your income and outgoings when we arrange a payment plan for this shortfall debt
• If we cannot arrange a suitable plan, we may go to court to get our money back. You might have to pay more court costs
• If a shortfall debt is not paid, it could affect whether you are able to get credit in the future

Further loans and legal advice

Some companies may offer you new loans or invite you to sell your property to them (and then lease it back), as a way of fixing your short-term financial difficulty. Please be careful, as such actions may not be in your long-term interest. We would always advise you to seek independent advice before entering into any arrangement of this type. 

Treating you fairly

If you do not think we have treated you fairly, you can complain to:

Sandhya Kawar
Chief Risk Officer
The Cambridge Building Society
51 Newmarket Road
Cambridge
CB5 8EG

Read our full complaints procedure.

We’ll be here

If you’re feeling vulnerable due to trouble making payments on your mortgage, we’ll be here to help – with a personal approach and practical support. Please call us on 0345 601 3344 or email us at thecambridge@cambridgebs.co.uk.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE