One million UK households struggle to pay mortgage
Homeowners are already feeling the pinch of rising food and energy bills as well as higher living costs meaning many are ‘just about managing’.
Now research from broker L&C Mortgages reveals that as many as 2.6 million people think their monthly mortgage payments are too high but 58% have never remortgaged for a better deal.
This is despite more than a third (36%) of homeowners being on their lender’s Standard Variable Rate mortgage which is typically higher than a fixed deal. L&C research revealed more than 1.1 million households are wasting £2.78bn by sitting on the wrong mortgage deal.
In a bid to ensure monthly payments are met, 2.5 million admitted they have been forced to make significant cutbacks to reduce their spending
The research found that 4.2 million people can’t imagine a time when they won’t be paying their mortgage, highlighting that people feel overwhelmed by their monthly payments.
And as well as worries about paying the mortgage, Brits have an average debt of £10,048 across overdrafts, student loans and on credit cards.
For those aged between 18 and 34, this figure rises to £12,992, which could present a real problem for those trying to get their foot on the property ladder.
However, despite homeowners feeling as though they’ll be paying their mortgage forever, the end could be in sight for many as the average household expects to pay off their current mortgage in 13 years.
Regionally, half of the UK should be able to pay off their mortgage in just over a decade, though Londoners will take longer to repay the debt:
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”.
Hollingworth said it’s really important people keep on top of their mortgage and take control of their monthly payments by using the current low in mortgage rates to their advantage.
“Always ask – could I be on a better deal?” he said.