There are clear warning signs in the latest data of the troubles that lie ahead for many homeowners.
Over the past 12 months there has been a 23% jump in the number of homeowner mortgages in arrears of 2.5% and 5% of the outstanding balance.
This figure is significant and suggests that pressure is building on homeowners as they struggle with higher living costs on top of huge rate rises.
Even with some lenders starting to lower rates, people are going to be paying significantly more when they come to remortgage and we’re going to see far greater numbers struggle to meet their monthly repayments. This issue will be compounded if the economy continues to falter and the jobs market begins to suffer.
In the worst-case scenario, it will lead to more homes being repossessed but there are options available to homeowners long before it reaches this critical stage.
Homeowners should speak to their lender as soon as they begin to struggle. New rules offer mortgage customers greater flexibility and you could look at extending the term of your mortgage to reduce costs, switch to an interest only mortgage and potentially defer payments. Â
There are options on the table, so it’s better to reach out sooner rather than later.
Kevin Brown is savings specialist at Scottish Friendly
