New Which? research reveals that 72% of mortgage holders are worried about their mortgage rates, with 14% struggling to make repayments.
The research also found that just a third of people (36%) who are struggling with mortgage repayments have approached their lender for help. Options available to lenders include moving customers from a repayment to interest-only mortgage, allowing them a payment holiday or allowing them to move to a different deal.
Interest rate rise could cause problems
Which? is calling on lenders not to use the current financial crisis as an excuse to neglect struggling borrowers.
Which? executive director Richard Lloyd said: ‘With ongoing uncertainty about the economy, it’s not surprising that many people are worried about their household finances. For some it would only take a small increase in mortgage rates to send them over the edge.
‘If you’re struggling with mortgage repayments then your first port of call should be your lender. It’s not in anyone’s interest for people to default on their mortgage, so it’s important that lenders do all they can to help their customers who are struggling with repayments.’
Contact with lenders is essential
Although in over three quarters (78%) of cases borrowers were offered some form of assistance, Which? warns that a significant minority of lenders aren’t doing enough to help their customers.
An increase of £50 a month in mortgage repayments would have an impact on three quarters of households. 37% would need to cut back on regular spending, 20% would reduce the amount they are saving and 9% would not have enough for essentials.
Although the Bank of England Base Rate is not expected to rise in the near future, recent research by Which? Money shows that a fifth of lenders have increased the rates on their SVR mortgages since the rate reached its all-time low of 0.5% in March 2009.
If you have concerns about your mortgage repayments, visit our guide to avoiding repossession.
Visit our mortgage deal finder to see if you could save money by switching your mortgage.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.