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A quarter of mortgage-holders use credit to make payments – StepChange

  • 08/02/2024
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A quarter of mortgage-holders use credit to make payments – StepChange
Nearly a quarter – 23 per cent – of mortgage payers have used credit to keep on top of payments in the last 12 months, a debt charity has found.

A poll from StepChange Debt Charity revealed that 44 per cent of people with a mortgage were struggling to keep up with their bills and credit commitments. This was up from 36 per cent in September. 

More than a third – 35 per cent – were showing at least one sign of financial difficulty. StepChange defines this as making just the minimum repayments on debts, using overdraft in each of the last three months, using credit, loans or an overdraft to make it through to payday or falling behind on essential household bills.  

Signs of financial difficulty also include using credit to keep up with existing credit commitments, facing late payment or default charges, missing a regular monthly payment on at least one debt, and using credit to pay essential household bills.  

The charity considers someone to have a severe debt problem if they are in at least three of these scenarios.  

The survey also found that 21 per cent of respondents had dipped into their savings in the last 12 months so they could make mortgage payments. 


More support needed 

This data comes after figures from UK Finance published today showed a rise in homeowners and buy-to-let (BTL) borrowers in mortgage arrears. 

The charity said that, with interest rates still relatively high, the government should prepare to help borrowers, as many are yet to refinance onto a new rate with potentially higher payments. 

Richard Lane, chief client officer at StepChange Debt Charity, said: “We know from our own clients that people tend to prioritise their mortgage and fall behind in other areas when they’re struggling to make ends meet, so it’s especially worrying to see mortgage arrears creeping up across the UK. 

“Higher mortgage payments and wider cost-of-living pressures have eroded people’s ability to cope financially, so it’s not surprising that more are turning to credit or savings to cover essential housing costs. However, with no indication of when rates might come down, people risk finding themselves trapped in long-term problem debt as that credit ultimately becomes unsustainable.” 

He added: “We would urge the government to consider how it can step in to help those in financial difficulty now and in the near future. All government cost-of-living support is due to end in March, removing an essential safety net for low-income households.  

“The mortgage charter was introduced last year in response to high rates putting pressure on households – updating and extending these measures could be beneficial in supporting struggling mortgagers.” 

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