The majority of the top ten mortgage lenders have accounted for a 22% spike in mortgage defaults over the course of 2024, new research from Eligible has revealed.
According to recent findings, over 492,000 mortgage-holders are set to miss a payment in the next six months.
Eligible identified the rapid rise in mortgage rates as the primary culprit behind the ongoing crisis of debt and default – as a further 670,000 mortgage holders have already missed a payment in the past 12 months.
On a more personal level, 5.4 million have cited their mortgage as a significant cause of financial-related stress alongside a spiralling cost of living and burdensome energy bills.
Zahra Hassan, co-founder of Eligible, said: “The fundamental problem is that mortgages are a financial product that customers take out only once every three to five years.
“This means that they aren’t regularly engaging with their mortgage and aren’t in the loop of what all their options are.
“In a broader sense, rising interest rates, coupled with increased energy and living costs, heighten vulnerability to default.
“However, the key factor that pushes someone from financial strain to actual default is their lack of awareness about the array of options that their bank could have offered to temporarily ease their financial burden, particularly on their largest financial obligation – their mortgage.”
Hassan added: “What’s needed – and what we’re doing at Eligible – is an active two-way dialogue, and AI-powered systems like Eligible facilitate this by initiating interactions with customers and monitoring their responses to gather insights.
“For instance, we proactively send educational content to customers to assess their anxiety levels and their understanding of their current financial products.
“Based on this information, we can fine-tune our approach by crafting more personalised educational content and adjusting our tone to be softer, supportive, and empathetic. This way, borrowers can better appreciate that lenders are here to assist them.”
