1.4 million households struggling to pay their mortgage
Published ¤ 17/05/2017 14:12:43
1.4 million UK households are struggling to pay their mortgage and 2.6 million people think their monthly mortgage payments are too high, according to research from L&C Mortgages.
Over half (58%) have never remortgaged for a better deal, despite 2.5 million admitting they have been forced to make significant cutbacks to reduce their spending in order to afford their mortgage payments.
Over a third (36%) of homeowners are still on a Standard Variable Rate mortgage, meaning that 4 million people could see their payments go up even more if interest rates rise.
In total, L&C believes that 1.1 million households are wasting £2.78bn by sitting on the wrong mortgage deal.
4.2 million people said they cannot imagine a time when they will not be paying their mortgage, partly due to an average debt of £10,048 across overdrafts, student loans and on credit cards.
David Hollingworth from L&C Mortgages said: "The fact that people have been making cuts in order to cover mortgage payments indicates how people feel they are "just about managing" in many aspects of their lives.
"We know that British households last year ran down their savings to a record low and that the cost of basics such as energy and the weekly shop are continuing to rise - so it's no wonder that people are feeling the pressure when it comes to their monthly mortgage payments. The problem is that although people feel they are struggling, they are not taking steps to manage their mortgage. Our research has found that millions are sitting on the wrong deal, even though seeking advice could potentially save consumers some hard earned cash by getting a better deal - and even enable them to pay off their mortgage more quickly."
Paul Skinner from PKS commented "Too many people tend to bury their head in the sand when they get into difficulty meeting their mortgage payments. It is essential to address the issue as soon as it becomes apparent. Lenders have a duty to try to help those with payment difficulties, and there are many ways to help reduce the impact of mortgage debt.
"The first thing people should consider is "What would happen if I was unable to work"? There are insurance policies available that can help pay the mortgage if someone becomes too ill, or has an accident preventing them from working. As soon as a problem is identified, it is vital that professional advice is sought, whether from a mortgage adviser or from the lender."
If you are having problems paying your mortgage, or you would like to discuss options to help avoid such problems, get in touch with PKS today - call 01256 701205.
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