If you are struggling to pay your mortgage speak to your lender straightaway, explain your situation and they may well agree to alter your arrangements to make it affordable.
Switch To An Interest-only Mortgage - One solution may be to switch to an interest only mortgage if you currently have a repayment mortgage. You pay off the interest only, not the capital sum, possibly reducing your monthly payment by a third. The capital sum left at the end of the term will be higher but this may be a short-term fix or can continue and be paid off by other means or when the house is sold. If you do not want to sell at the end of the term you must be sure you will have the money to pay the outstanding capital sum or you will have to sell.
The worry would be if your house has de-valued sufficiently for you to be in a negative equity situation if you have to sell. So, you could say it would be a better short-term solution rather than long-term.
Extend the term - Another possible help would be to extend the term of the mortgage say from 15 to 20 years to reduce your monthly payments; because you will have taken longer to pay you will have paid more at the end, like any loan.
A 100,000 pound repayment mortgage over 20 years at 6.7 per cent would cost 181,773.60 pounds, over 5 years more it would cost an extra 24,554.40 pounds, assuming the Standard Variable Rate stays the same during that time.
Suspend Endowment Payments - If you have an endowment policy to pay your mortgage you can halt payments temporarily and make interest-only payments instead.
You will significantly cut your outgoings but the eventual value of your endowment will be less and may leave you without Life insurance, which you may need to re-arrange and your cover under the endowment policy will still be deducted, rapidly reducing its value.
Re-mortgage - At present this could be hard, but, if you can find a cheaper SVR (Standard Variable Rate) than your lenders, you could reduce your monthly outgoings and with only an extra one-off arrangement fee to pay for changing.
Increase Your Income - Think of any ways you can increase your income. If you take in a lodger you can earn up to 4,500 pounds tax free with the 'Government Rent A Room Scheme'. You have to inform your lender if you have a lodger.
If you have Mortgage Payment Protection, Income Protection or Unemployment insurance you may be able to claim if you are made redundant, are injured or are sick.
Income Support for Mortgage Interest (ISMI) has increased the sum insured to 175,000 pounds (previously 100,000 pounds) and will pay out after 13 weeks not 39 weeks, as before.
Do Not Panic - If you find yourself in trouble act quickly and speak to your lender. They may allow you to stop payments temporarily until you are straight; however, the interest on the capital will continue to accumulate and you will have more to pay back.
If you miss some payments they might let you add these to the total amount borrowed and spread the cost over the term of the loan, rather than having to find a lump sum straightaway, but again, you will be paying extra in interest charges.
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