More homeowners seeking debt advice to combat rising mortgage rates

In June Creditfix saw the number of homeowners approved for an Individual Voluntary Arrangement (IVA) almost double from 7% to 13%. 

With average two-year fixed mortgage rates now above 6%, according to Moneyfacts, Creditfix is warning about the impact increased repayments could have on those with variable rates or leaving a fixed-rate mortgage. 

Creditfix data also shows that the average level of unsecured debt among homeowners struggling with their personal finances has increased by almost 20% since June 2022. 

Average debt levels among homeowners currently stand at over £31,000, 74% higher than the average among non-homeowners. 

Paul Mason, CEO at Creditfix, said: “Homeowners coming to the end of a fixed-rate deal or on a variable rate face increases to monthly repayments in the hundreds or even thousands of pounds and this will have a devastating impact on people, regardless of their financial position. 

“We’re seeing more homeowners than ever before seeking debt advice as a direct result of rising mortgage rates. Mortgage repayments should always be the first consideration when assessing outgoings, but such a steep increase can have a huge knock-on impact on other unsecured debts and we’re seeing those who previously had manageable debt levels unable to keep on top of it.”