1.4 million borrowers likely to face higher mortgage costs in 2008 as a result of payment shock will receive advice literature from the Money Advice Trust and the Council of Mortgage Lenders.
Supported by members of all sides of the House of Commons, MAT has been working with the CML to publish advice for those 1.4 million borrowers identified by the Financial Services Authority.
Joanna Elson, chief executive of MAT, says: “The idea behind the initiative is to give free early advice to these borrowers coming off their fixed-rate deals and highlight key sources of independent and free confidential advice, such as adviceUK members, Citizens Advice Bureaux, Business Debtline, National Debtline and the Consumer Credit Counselling Service.
“We have already seen a 16% increase between 2007 and 2008 in clients contacting National Debtline for advice regarding mortgage and secured loan arrears and we fear that people really are starting to struggle with their mortgage payments as credit becomes more expensive to service.”
Michael Coogan, director general of the CML, says: “A large number of borrowers are likely to see their mortgage costs rise when their fixed-rate deals expire this year. We may be past the peak of the ‘payment shock’ this will produce, but market conditions remain uncertain and borrowing costs are continuing to rise.
“Borrowers need to plan ahead for higher monthly payments and look carefully at the options available to them. Anyone who thinks they might have a problem in paying their mortgage should talk to their lender as soon as possible. The earlier the borrower makes the lender aware of any potential payment problem, the wider the range of options for dealing with it.”