Mortgage arrears – helpful rules

Three of the most helpful rules are explained below.

Pre-action protocol

Steps the mortgage lender should take before going to court.

Mortgage lenders have to follow some rules that were made to make sure you are treated fairly and that you are only taken to court as a last resort. In some cases if the rules have been broken the court can dismiss the claim and make the mortgage lender pay all the court costs.

These rules are contained in a document called a ‘Pre action protocol’. The full title of this document is ‘Pre-action Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property’.

Under these rules your mortgage lender must keep in contact with you, keep you informed about the arrears, take account of your situation and consider any proposals you have made to pay the arrears.

You can check whether your mortgage lender has followed these rules by looking at the protocol, which is available on the Government’s website at: Pre-Action Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property – Civil Procedure Rules ( Ministry of Justice – Pre-Action Protocol

The Norgan rule

Making an offer to repay the arrears

This is a complicated rule but it is useful because it may help you if your lender is trying to get you to pay your arrears at a rate you cannot afford. You will sometimes hear this rule discussed by the Judge and solicitors at the court hearing. They will often refer to it as the ‘Norgan principle’ and they may talk about a ‘Norgan figure’.

Under this rule when the court and your mortgage lender look at how long you should be given to pay off the arrears they have to take account of how long is left to go on your mortgage.

So, for example, if there are 10 years remaining on your mortgage term you could be given 10 years to clear your arrears by making monthly arrears payments on top of your monthly mortgage instalment. There is an example of how this rule operates in the box below:

Example of the Norgan rule

Mr and Mrs X have a 25 year mortgage with mortgage arrears of £2,500. Their monthly mortgage instalment is £500. They took out their mortgage15 years ago, which means there are 10 years remaining of the mortgage term.

Under the Norgan rule they therefore need to be able to clear their arrears within 10 years. The remaining 10 years breaks down into 120 months, so they need to be able to clear their arrears by making 120 monthly payments.

The £2,500 arrears therefore need to be divided by 120 months to find out the minimum amount that needs to be paid off the arrears each month. In this case the monthly arrears payments would need to be at least £20.83 and this would need to be paid on top of the £500 instalment, making a total payment of £520.83 per month.


£2,500 ÷ 120 = £20.83 per month arrears payment
(ie arrears ÷ remaining months of mortgage = monthly arrears payment)

£500 + £20.83 = £520.83 per month

(ie monthly mortgage instalment + monthly arrears payment = total / minimum monthly payment

There can be a downside to this rule because if the calculation shows that you cannot pay enough each month to clear the arrears within the remaining mortgage term the court are likely to make an outright possession order unless you are able to put forward an alternative proposal.

Details of the help available are on our getting advice page. The following Website also has some useful information about dealing with mortgage arrears: Factsheets & Public Advice Guides | NHAS

(The Norgan principle comes from a court case involving a borrower called Christina Norgan and Cheltenham & Gloucester Building Society. The full transcript of the case is available at: Christina Norgan Case)

Breathing Space under the Debt Respite Scheme

A mortgage lender can be temporarily prevented from obtaining or enforcing a court order if a defendant with mortgage arrears has obtained ‘breathing space’ under the Debt Respite Scheme.

Under the breathing space scheme creditors, including mortgage lenders, are prevented from taking action for a fixed amount of time. This period is called ‘breathing space’, ‘respite’ or ‘moratorium’ and it means legal action has been paused so that the person has more time to get help with their debt problems.

The standard breathing space period is 60 days and an application must be made on behalf of the person in debt by a regulated debt adviser.

If the person in debt has a mental health crisis there is no fixed time limit on the amount of breathing space but respite normally ends 30 days after crisis treatment ends.  Evidence from an approved mental health professional (AMHP) is required to obtain breathing space under these rules.

For details about how to obtain breathing space see this link: Breathing Space. Debt Respite Scheme Advice. StepChange)

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