Over the past year and a half many consumers across the UK have had to struggle with their mortgage repayments, with a series of five interest rate cuts between August 2006 and July 2007 taking up the interest rate by 1.25% and leaving many homeowners facing rocketing repayments that they struggled to meet each month.
It was thought that the recent 0.25% interest rate cut, applied by the Bank of England in December, might ease the situation, but recent reports suggest that many homeowners are still struggling to keep up with repayments on their mortgages.
Figures were recently released by the Bank of England showing that nearly one million homeowners in the UK are still struggling to keep up with their mortgage repayments despite the 0.25% interest rate cut. On top of this figure a further two million homeowners have admitted to experiencing at least occasional difficulties when it comes to making their mortgage repayments. Many officials think that the situation is set to get worse, with many homeowners due to come off cheap fixed rate deals in the coming months.
Consumers have admitted to taking a number of steps in order to try and keep up with mortgage repayments and avoid repossession. Nearly 50% of homeowners have reduced their outgoings by curbing their spending, 10% have taken on a second job to bring in more money to cover the mortgage repayments, and a further 10% have had to look at other forms of finance or extended their mortgage term in order to keep on top of mortgage repayments.
Industry experts are predicting that there will be a further two or three interest rate cuts over the course of this year, but many are concerned that for some homeowners it is too late, as they have already fallen into huge levels of debt and face repossession as a result of defaulting on their mortgage repayments.
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