UK mortgage payers making big changes to meet higher payments.
A recent survey has revealed that UK mortgage payers are making significant adjustments to meet the increased payment requirements. This indicates a proactive approach from borrowers who are taking steps to manage their financial obligations effectively. The findings of the survey shed light
According to a KPMG study, UK individuals are tapping into their savings or reducing the amount they contribute to their pensions.
According to a recent survey, individuals holding mortgages are implementing substantial adjustments to their financial situations to manage the significant increase in their monthly payments. These modifications involve reducing pension contributions and pursuing downsizing options.
According to a recent survey conducted by KPMG, over 1,000 mortgage holders were questioned regarding their response to the current situation of increased mortgage expenses or the potential of significant payment increases after their existing mortgage deals expire. The survey aimed to determine whether these individuals had already taken or were contemplating taking any actions to address this issue.
According to a recent survey, approximately 18% of respondents admitted to dipping into their savings to shrink their debt, with an additional 25% contemplating taking this step.
According to the survey, 16% of respondents have transferred a portion of their mortgage to an interest-only payment plan to reduce their monthly repayments. Additionally, 24% of respondents are considering making this change. This enables households to cover only the interest that accumulates on the mortgage, resulting in lower monthly payments.
According to a survey conducted by KPMG, it was found that 12% of the respondents had successfully extended the duration of their mortgage, resulting in reduced monthly payments. Additionally, 25% of those surveyed expressed interest in exploring this option.
Some individuals have resorted to a more drastic approach by selling their current property and relocating to a more affordable residence. Approximately 8% have already taken this step, while 22% are contemplating it as an option.
Regarding pension contributions, it was found that a percentage of individuals, precisely 11%, have reduced their gifts. Moreover, 20% of participants contemplate taking the same action.
The results were uncovered during KPMG's most recent Consumer Pulse study, which monitors the responses of over 3,000 individuals from various age groups, income brackets, and regions in the UK to the escalating cost of living challenge.
According to Linda Ellett, who heads the consumer markets, retail, and leisure division of the firm in the UK, it is expected that the current trend of allocating a more significant portion of household budgets and savings towards mortgage payments or renting expenses will result in reduced consumer spending in other areas of the economy. This situation poses ongoing challenges for retailers, brands, and leisure businesses.
Fortunately, there is a positive development for homeowners and potential buyers in the business domain. According to recent data from Moneyfacts, a more significant number of fixed-rate mortgages with prices below 5% have become available this week. This coincides with indications that the Bank of England might temporarily halt its interest rate hikes to mitigate inflation.
HSBC recently unveiled a range of enticing offers featuring a five-year fixed rate lineup of 4.9%. Notably, NatWest is set to follow suit and present their own deals starting as low as 4.89% on Thursday.
Meanwhile, the average interest rate on residential mortgages with a fixed term of five years is gradually approaching a level below 6%.
According to Moneyfacts, the average interest rate of new deposit deals slightly decreased from 6.04% on Tuesday to 6.03% on Wednesday, encompassing all deposit sizes available in the market.