Re-mortgage increases force homeowners to cut festive spend

Published: December 03, 2007

Nearly two out of three re-mortgagers are planning on cutting back on their festive spending in an attempt to meet increased mortgage payments, a new study has revealed.

With seven out of ten re-mortgagers expecting to see an increase in their monthly repayments when their current fixed rate mortgage deal expires, the Lloyds TSB research discovered homeowners are willing to resort to a number of options to meet any increased financial demand.

More than half of those questioned plan on reducing their monthly spending on other household bills to balance out the increased mortgage payments they expect, while 35 per cent were prepared to put travel plans on hold.

Commenting on the findings, Alison Burns, director of network mortgage sales at Lloyds TSB, said: "Cutting back on festive spending offers a short term solution but it's a good idea for people with mortgages to take a longer term view of their financial situation to ensure their mortgage is suited to their specific needs and changing circumstances."

"Some consumers may prefer a stepped rate deal that allows them to ease into the new higher interest rate environment. Other homeowners might opt for a tracker product, which will enable them to benefit from any potential drops in interest rates," she added.

According to the Council of Mortgage Lenders, 1.4 million property owners are facing an increase in their mortgage repayments of up to 60 per cent when their current fixed rate deals expire.