Debt problems – home repayments

Consumers worried about getting in to debt problems because of home repayments could prevent the need for debt solutions, by switching to a fixed-rate mortgage.

That's because one expert on the sector is claiming that holding a mortgage is going to become more costly, thanks to a rise in interest rates.

As a result, editor of What Mortgage, Ben Wilkie thinks many consumers will consider protecting themselves with a fixed-rate deal.

He says: "If you have been on a fixed-rate where you have got used to paying one certain amount and then suddenly you switch on to a variable, then that could be a huge amount of difference."

Mr Wilkie advises people worried about getting into homeowner debt because their mortgage repayments go up, should observe the market and think about remortgaging.

The comments come in response to figures from the Council of Mortgage Lenders (CML) which show that gross mortgage lending amounted to £9.5 billion, last month.

Debt expert Kevin Still says: “A majority of homeowners are now on variable rate mortgages and vulnerable to interest rate increases and debt problems.

"Switching mortgages has become more difficult through the recession and alternate plans may be required if reductions in disposable income mean that the household budget is in deficit. Your financial advisor may recommend that you seek debt advice.”

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