Payplan, a leading provider of free debt advice, has today welcomed the Bank of England’s decision to leave the base rate at 0.5% – but say it may not help homeowners already struggling to pay mortgage increases.
Jason Eaves, a Director at Payplan, said:
“Whilst the base rate has remained unchanged we have already seen a number of mortgage lenders increase their SVR (standard variable rate), and the Euro crisis could push the cost of mortgage borrowing even higher.
“Many households have faced a sustained squeezing of their incomes in the last few years while prices have continued to rise. Now an increase in their mortgage payment could be the straw that breaks the camel’s back.”
The group who will feel the economic pinch the most are the 800,000 mortgage customers who have struggled to meet their mortgage commitments and already been provided with some level of mortgage forbearance by their lenders.
He added:
“Prior to the credit crunch, financial deregulation, low interest rates and supreme confidence in the economy, led to a significant expansion of credit. For many low and middle income earners spending exceeded earnings for the ten years leading up to 2007 and this was fuelled by increased borrowing.
“Whilst there is evidence that some consumers have been using the windfall of super low mortgage rates to repay personal debt, there are many who continue to have significant unsecured debt outstanding.
“At Payplan we have almost 20 years’ experience of helping people with debt problems. We know some consumers take out new debt just to make payments on existing loans. This may provide some breathing space but is not sustainable.
“Our advice to anyone who is worried about falling into debt is to seek help as soon as possible. Further information is available here on our website or we can be contacted free on 0800 294 5205.”
For further information, or to arrange an interview, please contact Jane Jenkins, PR Manager on 01476 581 279.
Written by Gemma on June 7th, 2012
Filed Under Debt News, Financial News, Payplan Press Releases | Trackback | Leave a Comment
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