Owning a home comes with huge responsibilities — none bigger than keeping up with your mortgage. Losing your job is one of the scariest events that can happen if you have mortgage payments to meet, and it can send shockwaves through your finances, family, and future plans.
But you do have options, and you are not alone. Tens of thousands of UK homeowners every year face job loss while still having a mortgage.
This definitive, no-nonsense guide from SellTo will break down everything you need to know about protecting your home, understanding your rights, and navigating a path to financial stability after redundancy or job loss — even in the worst-case scenario.
Settle in. This is a deep dive, with no stone left unturned.
Contents
- Understanding How Job Loss Affects Your Mortgage
- Your Immediate Priorities
- Speaking to Your Lender
- Government Help and Support
- Private Insurance Options
- Budget Restructuring Strategies
- Prioritising Essential Bills
- Steps to Protect Your Credit Score
- Avoiding Mortgage Arrears
- Managing Arrears If They Happen
- What Happens If You Miss Payments?
- Mortgage Payment Holidays Explained
- Remortgaging Options
- Switching to Interest-Only Temporarily
- Selling Your House as a Last Resort
- Using a Quick Property Buyer Like SellTo
- Managing the Emotional Impact
- Talking to Your Family About Redundancy
- Negotiating Redundancy Settlements
- Claiming Benefits and Entitlements
- Universal Credit and Housing Support
- Handling Joint Mortgages After Redundancy
- Considering Lodgers or Renting Out Rooms
- When to Speak to a Debt Advisor
- Working With Citizens Advice or Other Charities
- Avoiding Payday Loans and High-Risk Credit
- Negotiating with Other Creditors
- Reducing Outgoings Immediately
- Tracking Spending and Budget Tools
- Emergency Fund Building
- Selling Personal Items to Raise Cash
- The Timeline of Mortgage Possession
- Repossession Orders: What They Mean
- Eviction Procedures
- Appealing a Repossession
- Mortgage Rescue Schemes
- The Role of the Financial Conduct Authority (FCA)
- How to Rebuild After Losing Your Home
- Strategies to Find New Work Faster
- Self-Employment as a Solution
- Updating Your CV and Interview Prep
- Upskilling and Retraining
- Protecting Your Mental Health
- Supporting Children Through Redundancy
- How Family and Friends Can Help
- Alternatives to Selling Your Home
- Final Survival Checklist
- About SellTo
1. Understanding How Job Loss Affects Your Mortgage
When you lose your job, your income takes an immediate hit. Unless you have significant savings or insurance in place, your mortgage is often the biggest monthly outgoing and the most worrying commitment to maintain.
Your lender expects payments in full and on time, even if you’re unemployed. Missing even one payment can trigger letters, phone calls, and eventually more serious action if things spiral.
That’s why acting early is essential.
2. Your Immediate Priorities
If you suddenly lose your income, take these steps straight away:
✅ Check your savings
✅ Look at your redundancy payout (if any)
✅ Apply for any benefits you may be entitled to
✅ Contact your lender before the first missed payment
✅ Prioritise food, energy bills, and your mortgage above everything else
3. Speaking to Your Lender
Many people are scared to talk to their bank — but this is the first thing you should do. Lenders are regulated to treat you fairly, especially after losing a job, and they have a duty to consider ways to help.
✅ Ask about payment holidays
✅ Ask if you can switch to an interest-only mortgage
✅ Explore reduced payments or a short-term repayment plan
✅ Explain your redundancy situation clearly
Lenders would always rather get something than nothing, so honesty helps.
4. Government Help and Support
Depending on your situation, you may qualify for:
✅ Universal Credit
✅ Support for Mortgage Interest (SMI)
✅ Other housing support grants
Apply as soon as you lose your job — delays can cost you dearly.
5. Private Insurance Options
If you took out Mortgage Payment Protection Insurance (MPPI), now is the time to claim it. Check the details of your policy, including:
✅ How long it pays out
✅ What exclusions apply
✅ The claim procedure
If you do not have insurance, move straight to negotiating with your lender and budgeting.
6. Budget Restructuring Strategies
Job loss means every penny counts.
✅ List all outgoings
✅ Rank them by priority
✅ Cut out any non-essentials (subscriptions, memberships, luxuries)
✅ Speak to utility companies for cheaper tariffs
✅ Shop around for cheaper insurance
You need to stretch every bit of money you still have.
7. Prioritising Essential Bills
Focus on paying:
- Mortgage
- Council tax
- Gas, electricity, water
- Food
These are called priority debts. Credit cards, personal loans, and catalogues come after these.
8. Steps to Protect Your Credit Score
Losing your job can damage your credit record, but you can limit the harm:
✅ Don’t miss payments without talking to creditors
✅ Set up token payments
✅ Register as unemployed with credit reference agencies if appropriate
✅ Stay on the electoral roll
Protecting your credit helps you remortgage or get future borrowing once you’re back on your feet.
9. Avoiding Mortgage Arrears
Mortgage arrears are serious. They trigger legal action surprisingly quickly if you ignore them.
✅ Always pay what you can
✅ Always speak to your lender before you miss payments
✅ Provide proof of your income change
Early contact shows you are acting responsibly.
10. Managing Arrears If They Happen
If you do slip into arrears, lenders can:
✅ Add arrears to your overall balance
✅ Accept a repayment plan
✅ Temporarily freeze part of the interest
They will not usually repossess straight away. Repossession is always a last resort.
11. What Happens If You Miss Payments?
✅ Month 1: letters and calls
✅ Month 2: a formal arrears notice
✅ Month 3: a court warning letter
✅ Month 6+: potential possession proceedings
The earlier you engage, the more options you have.
12. Mortgage Payment Holidays Explained
A payment holiday is a break from paying the mortgage, usually 1–3 months.
✅ You must ask permission
✅ Interest still builds up
✅ Missed payments may affect your credit
But a payment holiday can give breathing space if used carefully.
13. Remortgaging Options
✅ Switch to a cheaper deal
✅ Look at fixed rates for stability
✅ Consider extending the mortgage term
Speak to an independent advisor if you can — or at least get free lender guidance.
14. Switching to Interest-Only Temporarily
Interest-only reduces payments dramatically — sometimes by half — if your lender agrees.
✅ Usually a short-term measure
✅ You will still owe the full balance at the end
✅ Keeps you afloat in a crisis
15. Selling Your House as a Last Resort
No one wants to sell their home — but sometimes it is the cleanest, fastest way to recover.
✅ Clear the mortgage
✅ Stop arrears building up
✅ Avoid repossession marks on your record
16. Using a Quick Property Buyer Like SellTo
If time is critical and you need to sell in days rather than months, a professional homebuying company like SellTo can step in.
✅ Guaranteed cash offer
✅ Completion in as little as 7 days
✅ No repairs, no fees, no hassle
✅ Complete chain-free
This is a practical lifeline if you must move urgently.
17. Managing the Emotional Impact
Redundancy is traumatic. Mortgage worries add another layer of stress.
✅ Talk to friends or family
✅ Get professional counselling if needed
✅ Remember it is not your fault
✅ Take small steps each day
You can rebuild.
18. Talking to Your Family About Redundancy
✅ Be honest
✅ Explain your plan
✅ Let them help with budgeting
✅ Share updates
Family teamwork beats secrecy and panic.
19. Negotiating Redundancy Settlements
✅ Check your employment contract
✅ Understand statutory redundancy pay
✅ Negotiate a fair exit if possible
✅ Seek legal advice if your employer behaves unfairly
A decent redundancy settlement can buy you crucial breathing space.
20. Claiming Benefits and Entitlements
✅ Universal Credit
✅ New Style Jobseeker’s Allowance
✅ Council tax reduction
✅ Housing benefit if eligible
Apply immediately to avoid a gap in support.
21. Universal Credit and Housing Support
Universal Credit can include a housing element to help pay the interest on your mortgage. The rules are strict, and there is a waiting period, but it can make a big difference.
22. Handling Joint Mortgages After Redundancy
If you have a joint mortgage, talk honestly with your partner:
✅ How to cover the shortfall
✅ Whether you can rely on one income
✅ Whether to restructure the loan
Lenders will look at both incomes if only one partner is out of work.
23. Considering Lodgers or Renting Out Rooms
✅ Rent a spare room
✅ Use the money for mortgage payments
✅ Check your lender’s consent
Extra cash can help you stay in your home.
24. When to Speak to a Debt Advisor
If you feel overwhelmed, speak to a qualified debt advisor. They can:
✅ Negotiate with lenders
✅ Prioritise bills
✅ Set up repayment plans
✅ Stop harassment
25. Working With Citizens Advice or Charities
Free, impartial advice is invaluable. A trained advisor can help you understand your options and protect your rights.
26. Avoiding Payday Loans and High-Risk Credit
Never fill a gap with expensive short-term loans.
✅ Massive interest
✅ Spiralling debt
✅ Traps you worse
27. Negotiating with Other Creditors
✅ Credit cards
✅ Personal loans
✅ Car finance
Explain your situation early. Many will pause or reduce payments if you’re proactive.
28. Reducing Outgoings Immediately
✅ Cancel subscriptions
✅ Downgrade broadband
✅ Switch utility deals
✅ Sell non-essential items
Every £100 saved might protect your home.
29. Tracking Spending and Budget Tools
✅ Use a spreadsheet
✅ Write down every transaction
✅ Spot patterns to cut spending
Awareness is power.
30. Emergency Fund Building
✅ Set aside any spare cash
✅ Prioritise food, housing, energy
✅ Store in an instant-access account
31. Selling Personal Items to Raise Cash
✅ Electronics
✅ Designer clothes
✅ Jewellery
✅ Collectibles
This can buy a few months of mortgage cover.
32. The Timeline of Mortgage Possession
✅ Missed payments
✅ Lender letters
✅ Formal arrears
✅ Court hearing
✅ Eviction
Stay engaged to avoid the worst-case scenario.
33. Repossession Orders: What They Mean
If the court grants a repossession order:
✅ You usually get 28 days to leave
✅ Lenders sell the house
✅ You are liable for any shortfall
34. Eviction Procedures
Bailiffs will arrive with a court order if you ignore possession. Always leave peacefully to avoid further costs.
35. Appealing a Repossession
✅ Prove you can pay
✅ Propose a realistic plan
✅ Get legal advice
36. Mortgage Rescue Schemes
Some councils or housing associations buy your home then rent it back to you. These schemes exist but are limited and means-tested.
37. The Role of the Financial Conduct Authority (FCA)
The FCA regulates mortgage lenders and expects them to treat you fairly.
✅ Complain if your lender is unreasonable
✅ Keep records
✅ Ask for a fair assessment
38. How to Rebuild After Losing Your Home
✅ Prioritise new accommodation
✅ Protect your family
✅ Rebuild credit
✅ Start saving again
39. Strategies to Find New Work Faster
✅ Register with agencies
✅ Use LinkedIn
✅ Contact former employers
✅ Consider temporary or gig work
40. Self-Employment as a Solution
✅ Freelancing
✅ Consulting
✅ Starting a side hustle
You can regain control of your income.
41. Updating Your CV and Interview Prep
✅ Modern layout
✅ Focus on skills
✅ Practice interviews
✅ Keep confidence up
42. Upskilling and Retraining
✅ Online courses
✅ Grants
✅ New qualifications
Invest in yourself while job-hunting.
43. Protecting Your Mental Health
✅ Eat well
✅ Exercise
✅ Stay connected to friends
✅ Get professional help if you feel depressed
44. Supporting Children Through Redundancy
✅ Reassure them
✅ Keep routines stable
✅ Involve them in budgeting positively
45. How Family and Friends Can Help
✅ Financially
✅ Emotional support
✅ Practical childcare
46. Alternatives to Selling Your Home
✅ Rent rooms
✅ Negotiate with lenders
✅ Borrow from family (cautiously)
47. Final Survival Checklist
✅ Prioritise mortgage
✅ Communicate early
✅ Budget ruthlessly
✅ Seek benefits
✅ Explore payment holidays
✅ Consider a quick sale if all else fails
48. About SellTo
SellTo is a trusted professional homebuying company, offering guaranteed cash purchases for homes in any condition, nationwide, with no fees or chains. If you are facing mortgage arrears or redundancy and need a fast solution, SellTo can buy your property in as little as 7 days, giving you peace of mind and a clean financial slate.
