TL;DR
Missing a mortgage payment triggers a formal arrears process that is recorded on your credit file. Lenders must follow FCA rules requiring them to treat customers in financial difficulty fairly and consider forbearance before taking possession action. Contacting your lender before missing a payment gives significantly better outcomes than waiting.
Last reviewed: June 2026 | Sources: FCA, FOS
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Mortgage Key Facts: Missing a Mortgage Payment Credit file impact: recorded immediatelyPossession action: lender must exhaust forbearance firstFCA rule: MCOB 13 governs arrears handlingFree advice: StepChange, National DebtlineRegulator: FCA |
What happens when you miss a mortgage payment
When a payment is missed, the lender records the missed payment on your credit file with the credit reference agencies. This record remains for six years and affects your ability to obtain credit, switch mortgage products and in some cases pass employment or rental checks. The lender also begins an arrears management process governed by the FCA's Mortgage Conduct of Business rules, specifically MCOB 13.
The risks most people do not check
Early contact produces better outcomes. Lenders are required under MCOB 13 to consider forbearance options before pursuing possession. These options include payment holidays, term extensions, temporary interest-only switches, and payment arrangements. However, lenders are more likely to offer these options to borrowers who contact them proactively before missing a payment than to those who go silent.
Arrears charges compound the debt. Most mortgages allow lenders to charge arrears administration fees and additional interest on the arrears amount. These charges are added to the outstanding balance and continue to accrue. A missed payment of £1,000 can become a significantly larger arrears balance within a few months.
Possession is a last resort but it does happen. Lenders must exhaust reasonable forbearance options before seeking possession and courts apply further scrutiny. However, lenders can and do obtain possession orders where arrears are substantial and borrowers have not engaged. The process from first missed payment to possession typically takes 12 to 18 months but varies significantly.
Government support schemes have time limits. Support for Mortgage Interest is a government loan available to certain benefit recipients to cover mortgage interest. It is a loan secured against the property, not a grant, and must be repaid when the property is sold.
What the small print usually says
Mortgage terms typically specify that the full outstanding balance becomes immediately repayable on default, a clause known as acceleration. In practice, lenders do not typically invoke this immediately on a missed payment but it is a contractual right that strengthens in arrears situations.
Who is most at risk
Borrowers on variable rate mortgages following recent base rate increases, those who stretched affordability at low rates, self-employed borrowers with variable income, and those approaching the end of a fixed term who cannot afford the revert rate are at highest risk of payment difficulty.
What to do before missing a payment
Contact your lender immediately, explain the circumstances, and ask specifically what forbearance options are available. Request everything in writing. Simultaneously contact a free debt advice service: StepChange, National Debtline or Citizens Advice can provide independent guidance on all options including government schemes.
Where to complain if the lender does not follow the rules
If a lender does not follow MCOB 13 arrears handling requirements, fails to consider forbearance, or applies charges incorrectly, the Financial Ombudsman Service can investigate and direct remedial action including fee refunds and compensation.
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Disclaimer This article is for information only. If you are experiencing mortgage payment difficulty, contact your lender and a free debt advice service immediately. Kael Tripton Ltd is not regulated by the FCA. |
Frequently asked questions
How many missed payments before a lender starts possession proceedings?
There is no fixed number. FCA rules require lenders to consider forbearance before possession action. In practice, lenders may begin formal proceedings after three to six missed payments, but the timeline varies significantly based on the borrower's engagement and circumstances.
Can one missed payment affect my ability to remortgage?
Yes. A missed payment recorded on your credit file will affect most lenders' credit scoring. Some specialist lenders consider applications with recent arrears but at higher rates. The impact reduces over time as the record ages.
What is a payment holiday and can anyone get one?
A payment holiday temporarily suspends mortgage payments. Lenders are not obliged to offer them and will assess affordability and account conduct. Interest continues to accrue during the holiday and the missed payments are typically added to the outstanding balance.
Does missing a payment mean I will lose my home?
Not automatically. FCA rules require lenders to exhaust forbearance options before possession action, and courts apply further scrutiny. However, unresolved arrears without lender engagement can ultimately lead to possession proceedings.
Is Support for Mortgage Interest a grant?
No. SMI is a government loan secured against your property that covers mortgage interest payments for eligible benefit recipients. It accrues interest and must be repaid, typically when the property is sold or transferred.
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Sources FCA: MCOB 13 Arrears and Repossessions |
