Worried about mortgage arrears
The Financial Services Authority has announced today that one in five people are worried about making mortgage payments in 2008. Many 100% mortgages deals and borrowers whose fixed rates will be coming to an end this year will be extremely concerned what their new payment will be.
The FSA is so concerend that they will be launching a £2m advertising campaign. Northern Rock is only offering 100% mortgage borrowers the standard variable rate when borrowers fixed rates expire. Other lenders have not passed on all the rate reductions as they are struggling to make profits.
“Economic conditions are getting tougher, putting pressure on family finances,” said Chris Pond, FSA director of financial capability. fsa.gov.uk
The poll of 2,011 people aged over 16, of whom 573 were mortgage holders, found that 19% of those asked were concerned about meeting the cost of their mortgage repayments.
Last month, the Council of Mortgage Lenders (CML) cml.org.uk/cml/statistics said repossessions rose by 21% in 2007 to 27,100 homes, the highest figure since 1999, which reached over 70,000.
Many 100% mortgage borrowers and people who’s fixed rate is coming to end would be wise to start shopping around and talking to a mortgage broker. If they are gtting into any difficulty they should talk to their lender as soon as possible, or contact a free independent debt advice service.
