Data from L&C Mortgages has found that 1.4 million UK households are struggling to pay their mortgage and 2.6 million people think their monthly mortgage payments are too high.
A report from the adviser group says over half (58 per cent) have never remortgaged for a better deal and 2.5 million admitted they have been forced to make significant cutbacks to reduce their spending in order to afford their mortgage payments.
L&C’s data also shows that the nation has an average debt of £10,048 across overdrafts, student loans and on credit cards. This number rises to an average of £12,992 when looking at those aged between 18 and 34.
L&C also revealed that over a third (36 per cent) of homeowners are still on a Standard Variable Rate mortgage (SVR). ‘Not only are these rates typically higher but if interest rates rise, the 4 million people who are on SVR mortgages could see their payments go up even more,’ the report says.
L&C Mortgages’ David Hollingworth says: “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.”
L&C also looked at the average time it would take UK residents to pay off the existing balance on their mortgage and found that despite homeowners feeling as though they’ll be paying their mortgage off forever, the end could actually be in sight for many. The average household expects to pay off their current mortgage in 13 years. In fact, when looking at the data across the different regions, the outlook is positive, with half of the UK potentially paying off their mortgage in just over a decade.