670,000 households warned they have missed mortgage payment

People who have a fixed-rate mortgage have been warned after 500,000 homeowners were estimated to likely miss a payment within the next six months. 670,000 home buyers have missed a mortgage payment in the past 12 months.

And the research from Eligible found 492,000 expect to do so over the next six months. Zahra Hassan, co-founder at Eligible, said: "The fundamental problem is that mortgages are a financial product that customers take out only once every 3-5 years.

"This means that they aren’t regularly engaging with their mortgage and aren’t in the loop of what all their options are. In a broader sense, rising interest rates, coupled with increased energy and living costs, heighten vulnerability to default.

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“However, the key factor that pushes someone from financial strain to actual default is their lack of awareness about the array of options that their bank could have offered to temporarily ease their financial burden, particularly on their largest financial obligation – their mortgage.”

487,000 mortgage holders are about to default on their home loan without any plan about what they will do, the research has also found. The figures are based on estimates by Eligible – the AI financial communications company which works with a number of banks.

It says that some 5.4m Britons cite mortgage payments as a ‘significant’ cause of financial related distress as the Cost of Living crisis continues. It comes as five mortgage lenders have increased rates in the latest blow to homeowners, as expectations of when the Bank of England will reduce interest rates are pushed further back.

Barclays, HSBC, NatWest, Accord and Leeds Building Society informed mortgage brokers this week that they were going to be upping rates on some of their mortgage deals. Elliot Culley, director at Switch Mortgage Finance said: “The rate rollercoaster rolls on. Just when the market appears to be picking up some momentum, there is a sharp change of direction. We are now seeing the spike in swap rates last week, filtering through to the public as lenders raise their rates in response.

“The volatility we are experiencing currently really amplifies how important it is to secure a rate as soon as possible, as this could save you hundreds of pounds, especially for existing homeowners.”