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Four in 10 mortgage-holders say they have been concerned about their ability to meet their monthly repayments during the past two years.
New Which? research has revealed the impact of high interest rates on homeowners. Average rates peaked at 6.85% in summer 2023, up from 3.95% a year earlier.
Despite banks offering a range of support options to people struggling to make their repayments, less than a quarter of those we surveyed had reached out to their provider for help.
Read on to find out what action homeowners take when they're struggling to pay their mortgage, and for advice on the support options available to help you stay on track.
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Compare mortgagesIf you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Mortgage-holders have faced challenging economic conditions over the past couple of years.
Inflation soared in 2022, resulting in a series of rises in the Bank of England's base rate and mortgages getting much more expensive.
The rate of inflation is now back below the Bank of England target of 2%, and the base rate is expected to come down gradually over the next year; however, home loans are still more expensive than before.
Homeowners who are about to come to the end of a five-year deal are facing the biggest hikes. In November 2019, mortgage rates averaged just 2.49%, less than half the current rate of 5.39%.
In August and September, we asked 3,556 mortgage holders if they had been concerned about making their mortgage payments in the past two years.
Overall, 39% of respondents said they had been concerned, with 9% of these saying they'd been very concerned.
We asked them what action they took. Most commonly, worried homeowners reduced their day-to-day spending (58%) and cut back on leisure expenses (56%).
A smaller proportion (16%) borrowed money from friends or family members.
Surprisingly, less than a quarter (23%) reached out to their lender for support.
In June 2023, the government responded to rising mortgage rates by introducing measures to standardise support for struggling homeowners.
Previously, the level of support available varied depending on the lender’s individual policy.
The Mortgage Charter was established to expand the support offered to customers.
There are 49 lenders that have signed up, representing around 90% of the mortgage market, according to the Financial Conduct Authority (FCA).
FCA data shows that 1.4 million mortgages have benefited from one or more of the options set out in the charter.
Around 132,000 mortgage holders have been able to temporarily reduce their monthly payments under the rules.
If you’re struggling to pay your mortgage, it’s important to contact your lender as soon as possible.
Don't be shy about admitting you're worried, as your lender will want to help you find a solution.
Also, you shouldn't worry about harming your credit score, as discussing your situation and exploring options won't affect it.
Lenders offer a range of options to help struggling customers. These include:
If you have missed mortgage payments, you may be able to receive government support.
The help available will depend on whether you live in England, Scotland, Wales or Northern Ireland and if you receive any state benefits.
Our research found that 73% of people who had contacted their lender were satisfied with the support it offered, while 14% said they were not satisfied.
This shows the importance of picking a lender that provides good customer service, not just the one that offers the cheapest deal.
As part of our annual mortgage lender reviews, we rank banks and building societies on various elements of customer service, before naming our Which? Recommended Providers.
If you're struggling with debt, it can be helpful to take independent advice on your options.
Free advice is available from a number of organisations, including the following:
Find out more: free debt advice contacts
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