Can I Sell My House with Mortgage Arrears?

If a homeowner falls behind on their mortgage repayments, they are “in arrears”. Being in arrears does not always mean the property will be repossessed. A temporary financial issue can be managed effectively if the lender and borrower work together and agree on a short-term repayment plan to help get things back on track.

However, if a change in financial circumstances is likely to be permanent and the homeowner cannot repay the arrears, a quick house sale could provide a solution to both the lender and the borrower.

How many payments must I miss to be “in arrears”?

Technically, a homeowner is in arrears as soon as a payment is one day overdue. However, most mortgage lenders allow a 15-day grace period before they get in touch to find out what the problem is.

How common is it to fall into mortgage arrears?

According to figures published by UK Finance, there were 84,100 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q3 of 2025, 4% lower than the previous quarter. This translates to a figure of 0.97% of all outstanding mortgages being in arrears – almost 1 in 100.

Here at House Buyer Bureau, we understand that falling into arrears can sometimes be  unavoidable. We’re here to help homeowners get back on their feet. Whether you’ve experienced an unexpected redundancy that has left you unable to make your monthly mortgage payments, a sudden illness that means you can’t work, or a recent separation that has left you out of pocket, there are several solutions to consider.

What happens to my mortgage when I sell my house?

Regardless of whether you’re in arrears or not, any outstanding mortgage balance must be paid off when you sell a property. The only exception to this is if you are porting your mortgage to a new property – most mortgage lenders allow their borrowers to port their deal to a new home.

When your property is sold, your solicitor will pay off the mortgage’s outstanding balance with the proceeds of the sale. Anything left, minus any fees due to the estate agent and the solicitor or conveyancer, will be paid to you. 

If you’re in negative equity (i.e. the house’s value is worth less than the balance remaining on the mortgage) and the sale price does not cover the remaining mortgage balance, you will have to continue making payments to the lender until your debt is cleared.

Can I sell my house with mortgage arrears?

If you’re in arrears and can’t negotiate an alternative repayment plan with the lender, putting the property on the market is an option to consider. Even if the mortgage lender has started court proceedings by applying for a possession order, you are entitled to try to sell the house as a means of repaying the debt.

If the lender has not yet started court proceedings, under the Pre-Action Protocol for Mortgage Arrears, they can’t start such proceedings if you’re taking steps to sell your home and pay off the mortgage.

You could return the keys to the mortgage company, but you’ll still be responsible for all the associated costs, such as mortgage payments, insurance, and maintenance, until the property sells. Also, if you’ve handed back the keys or been evicted, the mortgage lender is likely to achieve a sale price far lower than you could if you manage the sale yourself. Lenders often sell properties at auction, which typically attract lower offers from property developers looking to snag a bargain to fix up and sell on at a profit. This could mean the proceeds from the sale will not cover all you owe.

How quickly can I sell my house?

Instead of returning the keys to your mortgage lender and getting a low sale price, one option is to put your house on the open market and wait for it to sell. However, from the first day a property is on the market to legal completion of the sale takes an average of 18 weeks in the UK. Add to this the fact that 24.3% of UK house sales in 2025 fell through, and selling via traditional routes becomes less attractive. Remember, all the time you’re waiting for the perfect buyer and for the sales process to run its course, the cost of mortgage repayments, insurance and general maintenance will be mounting up.

A more appealing option for a homeowner in arrears needing a quick sale is to engage the services of a house buying company. Here at House Buyer Bureau, we have helped hundreds of homeowners to sell their homes for a fair price and fast. This is the only option that will guarantee a sale and one that can complete in as little as seven days.

The cash offer we make will be slightly lower than the market value of a property, but when all the costs involved in a traditional house sale are considered, there is little difference in the amount you will walk away with. Take a look at some example figures. Once the proceeds from the sale are in your account, you can use them to repay the mortgage lender and any funds left over can cover the cost of purchasing a more affordable home or moving into rented accommodation.

How does repossession happen and how can I avoid it?

To avoid repossession and get on top of your arrears, you should contact your lender as soon as you miss a payment. Don’t wait for them to contact you.

Late repayments

Many mortgage lenders will allow a grace period on monthly repayments, where they’ll allow homeowners to pay up to 10-15 days later than normal, before the payment is officially classed as missed/late. If you think you will be late with your payment, you should check your mortgage agreement and/or get in touch with your lender to find out more about any grace period you may be eligible for.

If your late house payment falls beyond the initial grace period, a late fee will usually apply. Depending on your mortgage agreement, this can be around 5-10% of your monthly repayment. While this may not seem like too big a penalty, late fees and missed payments can quickly become unmanageable.

If you can’t keep up with regular payments or agree on a new repayment plan, the lender may start court action to repossess the property. This process is often started after three consecutive missed payments.

Working with your mortgage lender

Your mortgage company is regulated by the Financial Conduct Authority (FCA), and they must abide by the FCA’s Mortgage Conduct of Business (MCOB) rules, which makes sure that borrowers are treated reasonably and fairly. Under these rules, your lender must work with you to create an alternative repayment plan until you can carry on with regular payments. Your lender should only seek repossession as a last resort.

Your lender may agree to accept reduced payments for a fixed period or switch you to a different type of mortgage with lower monthly payments.

What other options do I have?

You may be able to find a temporary solution that reduces your outgoings (cutting back on certain expenses) or increases your income (taking on a second job or a lodger) until your financial situation stabilises. There are lots of organisations that offer free debt advice and may be able to help, such as Step Change.

If your circumstances have changed, it’s worth contacting the local benefits office to find out if you are eligible for any government support, such as Support for Mortgage Interest (SMI). The Citizens Advice Bureau can also provide advice about the support that may be available.

If you plan to stay in the property, you could earn some extra cash by taking in a lodger Even if it’s not something you’d continue in the long-term, this could provide a temporary solution to a cash flow issue.

It might also be possible to claim under a mortgage payment protection policy if you have one. If you’re struggling to make repayments due to a job loss or illness, this type of insurance might cover the cost of mortgage repayments until you find new employment or are fit for work.

If your financial difficulties aren’t temporary and there’s no way that you’ll be able to resume regular mortgage repayments, it’s best to act fast and sell the property as soon as possible to avoid mortgage debt building up.

How House Buyer Bureau can help you with mortgage arrears

If you’ve fallen behind with mortgage repayments, it’s best to be proactive and speak with the mortgage lender. They are required to consider any reasonable proposals for repayment and there may be a way to overcome a temporary financial situation that allows you to stay in the property. If your circumstances have changed and the mortgage repayments are no longer affordable in the long-term, using a house buying service to get a guaranteed quick sale could provide the funds necessary to clear the debt and start again.

Alternatively, if you are looking to sell your house quickly to clear your debt, get in touch for your no obligation offer.