Can I Get a Mortgage with Mortgage Arrears?

If you’ve fallen behind on your mortgage payments, you may be wondering whether getting a mortgage in the future is still possible.

Mortgage arrears are often viewed more seriously by lenders than other types of adverse credit because they relate directly to a previous housing commitment. As a result, many people assume that having mortgage arrears means they’ll never be approved for another mortgage.

The reality is more nuanced.

Whilst mortgage arrears can make obtaining a mortgage more challenging, they do not automatically prevent you from securing one. Many people go on to obtain mortgages after experiencing mortgage arrears, particularly where the issues are historic and their finances have stabilised since.

The key is understanding how lenders assess mortgage arrears and what factors can influence your options.

The Short Answer

Yes, you may still be able to get a mortgage if you’ve had mortgage arrears.

Whether a lender is willing to consider your application will depend on factors such as:

• How recent the arrears are
• How severe the arrears were
• Whether the account is now up to date
• Whether the arrears have been cleared
• Your deposit size
• Your income and affordability
• The rest of your credit profile

Every lender has different criteria, so being declined by one lender doesn’t necessarily mean every lender will decline your application.

What Are Mortgage Arrears?

Mortgage arrears occur when you miss one or more mortgage payments and fall behind with your agreed repayments.

Arrears can range from:

• A single missed payment
• A short period of temporary arrears
• Multiple months of missed payments
• Significant long-term arrears

The more severe and recent the arrears, the greater the impact they are likely to have on your mortgage options.

Why Do Lenders View Mortgage Arrears Seriously?

Mortgage arrears relate directly to a person’s ability to maintain housing costs.

Because of this, lenders often view them differently to issues such as:

• Credit card missed payments
• Utility defaults
• Mobile phone arrears

When assessing an application, lenders may ask:

• Why did the arrears occur?
• How long did they last?
• Have they been resolved?
• Has the applicant managed their finances well since?

Many lenders understand that life events can cause temporary financial difficulties, but they also want reassurance that the situation has improved.

Can I Get A Mortgage If I Have Current Mortgage Arrears?

This can be one of the more challenging scenarios.

Most lenders prefer mortgage accounts to be up to date before considering a new application.

However, every case is different.

If arrears are recent or still outstanding, lender options are likely to be more limited and specialist lenders may be required.

Can I Get A Mortgage After Clearing Mortgage Arrears?

Potentially, yes.

Once arrears have been cleared and mortgage payments have been maintained, more options may become available.

Lenders will often look at:

• How long ago the arrears occurred
• How severe they were
• Whether payments have been maintained since
• Whether there have been any further credit issues

The longer the period of good conduct since the arrears, the more lender options may become available.

Does The Age Of The Arrears Matter?

Absolutely.

The age of the arrears is often one of the biggest factors lenders consider.

Mortgage Arrears Within The Last 6 Months

Recent arrears can significantly reduce lender choice.

Many lenders prefer to see a period of clean payment history before considering an application.

Mortgage Arrears Within The Last 12-24 Months

Some specialist lenders may be willing to consider applications depending on the severity of the arrears and the overall circumstances.

Mortgage Arrears More Than 3 Years Old

As the arrears become older, lender choice often improves, particularly if there have been no further issues.

Mortgage Arrears More Than 6 Years Old

Historic arrears generally have less impact than recent ones, although some lenders may still ask questions about previous payment difficulties.

How Much Deposit Do I Need?

Deposit size can have a significant impact on mortgage options where mortgage arrears are involved.

In our experience:

• A larger deposit generally improves lender choice.
• A 10% to 15% deposit often creates more opportunities.
• More recent or severe arrears may require a larger deposit.

The stronger your deposit position, the more flexibility lenders may have when assessing your application.

Why Do People Fall Into Mortgage Arrears?

One thing we’ve learned from helping clients over the years is that mortgage arrears rarely happen without a reason.

Common causes include:

• Divorce or separation
• Relationship breakdowns
• Redundancy
• Illness
• Maternity leave
• Business difficulties
• Cost of living pressures

Many people experience a temporary financial setback before recovering and bringing their mortgage back up to date.

Specialist lenders often understand this and may be willing to assess the circumstances surrounding the arrears.

Why Might A Bank Decline Someone With Mortgage Arrears?

Many high street lenders have strict policies regarding mortgage arrears.

Even relatively small or historic arrears can sometimes fall outside a lender’s criteria.

This often leads applicants to assume they have no mortgage options.

The reality is that lenders assess risk differently.

Whilst one lender may decline, another may be willing to consider the application based on the wider circumstances.

What Else Do Lenders Look At?

Mortgage arrears are only one part of the assessment process.

Lenders will also consider:

Affordability

Can you comfortably afford the proposed mortgage payments?

Income

Stable and sustainable income remains important.

Existing Credit Commitments

Current debt levels can affect affordability calculations.

Deposit

Larger deposits generally improve lender choice.

Recent Financial Conduct

Lenders often want to see evidence that finances have been managed responsibly since the arrears occurred.

Common Myths About Mortgage Arrears

“I Can Never Get A Mortgage Again”

This is one of the biggest misconceptions we hear.

Many people successfully obtain mortgages after experiencing mortgage arrears.

“I Need To Wait Six Years”

Not necessarily.

Depending on the circumstances, there may be lenders willing to consider an application much sooner.

“All Lenders Automatically Decline Mortgage Arrears”

Every lender has different criteria.

What one lender won’t consider, another may be willing to assess.

“The Arrears Matter More Than Anything Else”

Whilst important, lenders will also assess affordability, deposit size, income and recent financial conduct.

Common Mistakes To Avoid

If you’ve experienced mortgage arrears and are considering a mortgage application, avoid:

Missing Further Payments

Recent payment history is extremely important.

Taking On Unnecessary Debt

Additional borrowing can affect affordability and lender choice.

Making Multiple Mortgage Applications

Applying without understanding your options can result in unnecessary declines and credit searches.

Assuming You Have No Chance

Many people rule themselves out before understanding what lenders may actually be willing to consider.

What We’ve Learned From Helping Clients With Mortgage Arrears

One thing that consistently surprises people is how often they assume mortgage arrears have permanently ended their chances of obtaining a mortgage.

In reality, many applicants are mortgageable far sooner than they expect.

We’ve also found that lenders often place significant weight on what has happened since the arrears occurred.

If the arrears were caused by a temporary life event and there has been a sustained period of good financial management since, options may be available that many applicants wouldn’t expect.

Every case is different, which is why understanding the full picture is so important.

Frequently Asked Questions

Can I get a mortgage with current mortgage arrears?

Potentially, although lender choice is often more limited and specialist lenders may be required.

Can I get a mortgage after clearing mortgage arrears?

Yes, potentially. Many people successfully obtain mortgages after bringing their accounts back up to date.

How much deposit do I need?

This varies depending on the lender, severity of the arrears and how recent they were, but larger deposits generally improve lender choice.

Can first-time buyers get a mortgage if they have historic mortgage arrears?

This is less common because first-time buyers haven’t previously held a mortgage, but lenders will assess any historic mortgage commitments where relevant.

Are mortgage arrears viewed more seriously than credit card missed payments?

In many cases, yes, because they relate directly to housing costs.

Final Thoughts

Mortgage arrears don’t automatically mean you can’t get a mortgage.

Whilst they are generally viewed more seriously than many other forms of adverse credit, there are lenders who may be willing to consider applicants depending on the circumstances.

The age and severity of the arrears, your deposit size, affordability and overall financial profile will all influence what options may be available.

The biggest mistake people make is assuming a previous period of mortgage arrears means they have no future mortgage options.

Every lender assesses applications differently, and what one lender won’t consider, another may be willing to review.

If you’ve experienced mortgage arrears in the past, don’t automatically assume a mortgage is out of reach. Depending on your circumstances, there may be more options available than you think.

Disclaimer: This article is intended for general information purposes only and should not be considered financial or mortgage advice. Mortgage eligibility and lending criteria vary between lenders and individual circumstances.

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