Mortgage repayments still proving difficult for many

Keeping up with mortgage repayments is still proving to be a real struggle for many homeowners in the UK, according to a recent report. Bank of England data shows that close to a million homeowners continue to struggle with mortgage repayments, despite a cut of 0.25% in the base rate in December.

Many consumers and industry officials had been hoping for a further interest rate cut in January, but the Bank of England decided to keep interest rates on hold at 5.5%. In the meantime, consumers are having to cope with increases in food costs, petrol prices, and energy bills, as well as high mortgage repayments.

The data shows that in addition the one million people that are struggling regularly with their mortgage repayments, another two million have admitted to experiencing occasional problems with their mortgage repayments. Experts have predicted that the situation is likely to worsen as a result of the credit crunch.

Industry officials are now predicting that the Bank of England will cut the interest rate again in February, and that there will be another cut within the first half of this year. This could ease the situation for those on variable rate mortgage, enabling them to benefit from lower repayments.