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"Many mortgage payments being made by credit card"

By admin | April 3rd, 2008 | General

Over the past year more and more homeowners have found it increasingly difficult to meet their mortgage repayments, and this is partly the result of increasing interest rates. The base rate has gone up five times since August 2006, each time by 0.25%, and this has taken the base rate from 4.5% to 5.75%. many homeowners with already crippling mortgage repayments have found it increasingly difficult to deal with the increase in their repayments and have been looking at other ways to help them to keep up with their mortgage repayments.

The results of a recent survey have indicated that many consumers are turning to their credit cards in order to make payments on their mortgage, with younger first time buyers being the worst offenders. The results showed that overall around 6% of homeowners had used their credit cards to make mortgage repayments over the past twelve months, but in the age group of 18-24s around 8% had used their credit cards to und mortgage payments in the past twelve months.

One industry official stated: “The number of people hit by the credit crunch, interest rate hikes and unaffordable housing costs is rapidly rising. For many people trying to keep a roof over their head, desperation is driving them to short-term, high-cost borrowing.
Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession.”

“There is such pressure on people’s budgets that paying your mortgage or rent by credit card — and then paying that card with another card — is becoming the norm for many people. It leads to an ever spiralling maze of debt, and eventually the credit simply runs out.”

Tags: interest rate, Credit Cards

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