Nearly half of mortgage holders in the UK are facing difficulties in keeping up with their bills and credit commitments, warns a leading debt help charity. A YouGov survey conducted for StepChange revealed that 45 per cent of borrowers are struggling to meet their financial obligations.
StepChange defines "problem debt" as experiencing three or more of these circumstances. The release of these figures coincides with expectations of the Bank of England raising the base rate for the 13th consecutive time on Thursday. For those with standard variable rate mortgages, a 0.25 percentage point increase could mean an extra £15.14 in monthly repayments, while a 0.5 percentage point increase could add £30.28. These calculations are based on the mortgages currently in existence. SVRs are determined by individual lenders, although they typically follow base rate fluctuations.
Chancellor Jeremy Hunt is scheduled to meet with banks on Friday to discuss possible assistance for borrowers struggling with their mortgages. Lenders have expressed their readiness to provide support. They may offer various options based on individual circumstances, such as extending the mortgage term, implementing a temporary payment holiday, or temporarily transitioning to interest-only payments.