Mortgage Nightmare

Monday, March 17, 2008

THOUSANDS of homeowners who took out 'safe' mortgage deals five years ago are now facing a bill of £1.02bn. Around a third of a million (340,000) five-year fixed rate mortgages were taken out in 2003 by homeowners seeking peace of mind.These deals expire this year, leaving many struggling to make ends meet as their monthly repayments are hiked by more than 35 per cent, according to research from analysts at Mortgage Monitor, a service that actively saves consumers money on their home loans.

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The research, which follows the launch of a £2m FSA advertising campaign to help 1.4 million homeowners on fixed rate deals that end this year, reveals the profound effect that price hikes are having on these individuals.

Meeting the mortgage bill has become their biggest financial headache, with one in five (23 per cent) saying that they are more anxious about keeping up repayments than they were when they took out the deal.

One in 20 (five per cent) of those on fixed rates – nearly 70,000 people - admit that they have absolutely no idea how they will foot the bill when their current rate expires.This level of anxiety is affecting every area of their lives, with stressed fixed rate mortgage holders suffering insomnia (14 per cent) because of worry over their home loan bill. Often, the strain is leading to arguments and tension between couples (17 per cent).

Mortgage-related stress is also likely to have a knock-on effect on Britons' finances. Nearly one in 20 (4 per cent) with fixed rates say that concern about the cost has affected their performance at work, while some have become physically ill from worry (five per cent).

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Source: http://www.shorehamherald.co.uk/horsham-news/Mortgage-nightmare.3880671.jp