One in four home owners can’t afford £100 mortgage payment rise

More than a quarter of mortgage holders wouldn’t be able to afford their monthly repayments if they increased by £100 a month, according to new research from Citizens Advice.

The research found that nearly half (45 per cent) would be unable to make their payments if they rose by £250 a month. In September, 49 per cent of mortgage holders Citizens Advice gave debt advice to said they had more money coming out of their finances every month than going in.

Citizens Advice estimated that this applied to around 11 per cent of all mortgage holders in the UK.

One in seven mortgage holders say they have already cut down on essentials while one in ten have taken out high-cost credit in order to make ends meet.

Citizens Advice Principal Policy mMnager David Mendes da Costa said “When people can’t afford their mortgage, one of three things happen. They can miss mortgage payments and go into arrears. They can cut back on essential spending on items like food and energy. Or they can go use credit to fill the gap, and go deeper into debt.”

” Mortgage lenders have to consider how to help people in financial difficulties through measures like restructuring payments, payment deferrals and removing additional fees and charges.”

“Of these three, it’s the first where people are best protected. Mortgage lenders have to consider how to help people in financial difficulties through measures like restructuring payments, providing payment deferrals and removing additional fees and charges.”

“But the worry is that people are not receiving this support and instead going without essentials or going deeper into debt.”

“The FCA and Bank of England are currently recording the lowest level of mortgage arrears in 15 years. However, they warn this may be a sign people are not coming forward to ask for help and risk deepening their debt or struggling without essentials.”