Struggling homeowners may opt for debt advice as they fail to benefit from low rates
Struggling homeowners may opt for debt advice as they fail to benefit from low rates
Wednesday 5th August 2009
A significant proportion of UK homeowners may start looking into dealing with their debts over the long-term as they fail to benefit from historically-low interest rates.
New figures released by the Halifax show that millions of mortgage holders have gained from their decision to opt for tracker deals, with the Bank of England's decision to slash interest rates to just 0.5 per cent meaning they are now enjoying, on average, 11 per cent more disposable income than this time last year.
However, for those borrowers who signed up to a fixed-rate mortgage prior to the economic downturn, high repayment commitments are still very much a reality, with many likely to seek out debt management advice as falling house prices push them further into negative equity.
Suren Thiru, an economist at the Halifax, explained that, while the past year has seen a fall in mortgage repayment rates for some, such improvements could turn out to be temporary as those on trackers could soon see their rates go up.
"Clearly, the situation will be less favourable when rates eventually begin to rise and many mortgage holders are benefitting from record low interest rates," she noted.
At the same time, Northern Rock has revealed that the number of its mortgage customers falling into arrears has risen over the past six month.
The growing trend suggests that many of the Newcastle lender's customers could soon benefit from professional debt management help as their monthly mortgage commitments remain high while employers continue to freeze pay and make job cuts.
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