Advice if you are struggling with your mortgage repayments

Of the 14% of homeowners who are struggling with their mortgage repayments, only a small fraction will approach their lender for help and advice on what to do. There are a number of ways your mortgage lenders can help you if you are struggling but it is important you let them know you have issues.

Some mortgage lenders will consider reverting your mortgage to interest-only until you feel able to manage your monthly mortgage repayments again. The interest-only mortgage is exactly what it sounds like, you only pay interest. This means rather than paying some interest and some off the amount borrowed, you will only have to pay whatever your lender says is the interest. This can significantly reduce your payments, helping you get over a temporary change in finances. However, there is a downside to this arrangement, for as long as you are paying interest-only payments, your actually outstanding mortgage loan is not reducing. This means you may add a couple of years to your mortgage term, and end up paying more for your home.

Research by the consumer magazine Which has shown that as many as a fifth of mortgage lenders have increased their rates on their mortgage. If you are living on a strict household budget, even the smallest increase in interest can increase your mortgage repayments and plunge you in to financial difficulties. It is not in your or your mortgage lender's best interests for you to fall behind with your mortgage repayments, which is why most lenders are willing to go the extra mile to help their customers who are struggling.

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