According to UK Finance, the number of mortgaged properties being repossessed in the UK has seen a significant 36% increase in the first quarter of 2024, with 870 properties being repossessed between January and March 2024. Further, there were 96,580 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, representing a 3% increase from the previous quarter, according to mortgage advisors Mojo Mortgages.

Within this group, 32,470 mortgages were in the most severe bracket, with arrears exceeding 10% of the balance, marking a 6% increase compared to the previous quarter, it said. The cost of living crisis and rising household bills have been cited as the primary factors driving this trend.

Mojo Mortgages said that increased mortgage rates, driven by base rate increases from the Bank of England (BoE), have also played a major role. After analysing its internal data, the company said it had found that the average mortgage rate when remortgaging in April 2022 was 1.78%.

However, in April 2024, the average mortgage rate soared to 5.33%. In an effort to tame high inflation, the BoE has raised the base rate from 0.1% in late 2021 to the current 5.25%, which has resulted in mortgage rates increasing over the past couple of years.

To put this into perspective:

• For a £250,000 mortgage over 20 years, the monthly payment in April was £1,238.

• Fast forward to April 2024, and the same mortgage would now cost £1,695 per month – an increase of £457 per month.

That’s an extra:

• £5,484 over a year.

• £10,968 over a two-year fixed-rate term.

• £16,452 over a three-year fixed-rate term

• £27,420 over a five-year fixed-rate term.

The combination of higher mortgage costs and the broader cost-of-living pressures has, unfortunately, put many mortgage borrowers at risk of losing their homes.

Mortgage experts share three tips for those struggling with their mortgage payments

Mojo Mortgages has shared its tips for navigating these tough times as a mortgage borrower.

Check to see if you’re on the standard variable rate (SVR)

If your mortgage payments have risen significantly recently, it’s important to act fast. The first thing to do is check whether you’ve been moved to your lender’s standard variable rate. If your previous deal has ended and you didn’t remortgage or transfer to a new product with your existing lender, this is likely the cause.

The standard variable rate is usually higher than other mortgages in the market. If you’re on it, you stand to save some cash by remortgaging to another deal. Consider speaking to a whole-of-market broker, who can compare thousands of mortgage deals from different lenders, and find the best option for your personal circumstances, potentially saving you thousands.

If your current deal is ending within the next six months and you’re worried about high rates, look into remortgaging options now

Most mortgage offers are valid for six months, so if your current deal is set to end within that time, you may be able to secure a new one now and switch when your existing mortgage ends, avoiding any early repayment charges. This stops you from being moved to your lender’s standard variable rate when your current deal ends, which is usually more expensive than other deals on the market.

If you choose a fixed-rate deal, you should also be protected from rate rises. And if rates fall before your new deal has started, you can usually switch again.

Remortgaged recently but still struggling with your mortgage payments? Speak to your lender

If you’ve remortgaged to another deal and are still struggling with your payments, it’s worth speaking to your lender. Due to rising mortgage rates, many lenders have signed up to the mortgage charter. This outlines several support measures to support borrowers with increasing costs.

These easements include switching to an interest-only mortgage for 6 months or extending the mortgage term temporarily to allow lower monthly payments. While these may help you in the short term, it’s worth noting that there are some longer-term repercussions (such as more interest paid overall). Make sure you discuss all the options available with your lender to find the right solution. It’s also worth noting that discussing your situation won’t impact your credit score.