500,000 mortgage holders warned ‘contact bank now’ or risk ‘repossession’
The Bank of England has sounded an urgent warning to anyone with a mortgage. Mortgage balances in arrears rose by 4.2 per cent compared to the previous quarter and now the Bank of England is warning households up and down the country.
As of December 2023, there were over 13 million outstanding mortgages in the UK totalling around £1.66 trillion. It means half a million owe cash – and the owings marks a huge 44.5 per cent increase from a year earlier, figures also show.
The proportion of total loan balances with arrears relative to all outstanding balances increased from the last quarter from 1.23 per cent to 1.28 per cent, the Bank of England data also shows. This is now at the highest level since the final quarter of 2016.
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James Hyde, of Moneyfacts Compare, said: “Mortgage rates may have fallen significantly since peaking last year, but they remain much higher than they’ve typically been over the past 14 years. For example, those who are coming to the end of a five-year fix in June 2024 can expect to see their interest payments almost double. If they wish to fix for a shorter term to keep their future options open, rates will be even higher: the average two-year is currently close to six per cent.”
New data those who are coming to the end of a five-year fix this month will see payments rise. MoneyCompare found on a mortgage with a £175,000 balance outstanding and 20 years left on the term, people face going from £957 to £1,204 each month.
Money Saving Expert said: “Simply missing a mortgage repayment without notifying your lender risks triggering the ‘arrears’ issue and starting the clock towards repossession. So if you’ve missed one or more repayments and not yet contacted your lender – particularly if you think it’s likely you’re going to miss another one – then reaching out is an urgent priority.”
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