Fixed rate mortgages: Deals ending leaving homeowners struggling
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With savings and pension funds depleted by the recent economic turmoil, pensioners are looking for other ways to supplement their pension and many are using their house as a way of generating cash. More...
Homeowners struggling with £1bn mortgage bill
Monday, 17 Mar 2008 10:02
Over a third of a million homeowners who took out fixed-rate mortgages five years ago are now struggling with repayments, according to new research.
A poll by Mortgage Monitor reveals increasing numbers of homeowners are worried about meeting repayments when their fixed-rate mortgages expire and repayments rise.
Some 340,000 five-year fixed rate mortgages were taken out in 2003 and are now due to expire.
The credit crunch means even those remortgaging are expected to struggle to find mortgage deals without higher repayments and those who stay with their lender could see the cost of paying the mortgage rise 35 per cent as their home loans switch to lenders' standard variable rates (SVRs).
The combined mortgage bill for those coming off five-year fixed rate deals is estimated as £1.02 billion.
Almost a quarter of those coming off fixed rate mortgages admitted they were anxious about keeping up with repayments, while five per cent said they had no idea how to meet the rising costs of their mortgage.
To cope with the rising cost of their mortgage, 40 per cent said they would head to a mortgage broker, while 17 per cent would stick with their existing lender to see what deals they have.
A total of 1.4 million homeowners will come off fixed rate mortgage deals of all lengths over 2008.