UK Mortgage Holders Facing Financial Challenges: Survey by KPMG Reveals Adjustments Made



Discover how UK mortgage holders are coping with financial challenges as they face higher monthly payments. A recent survey by KPMG reveals the adjustments made to deal with the situation.

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UK Mortgage holders are facing significant financial challenges as they grapple with higher monthly payments, prompting them to make various adjustments to cope with the situation, according to a recent survey conducted by KPMG. The survey questioned over 1,000 mortgage holders about the actions they have taken or are considering taking in response to the immediate reality of increased mortgage costs or the potential spike in payments once their existing deal expires.


UK Mortgage Holders Facing Financial Challenges: Survey by KPMG Reveals Adjustments Made | ogusyis

The survey revealed that approximately 18% of respondents had dipped into their savings in an effort to reduce their outstanding mortgage amount. Additionally, 25% of participants stated that they were contemplating this strategy. Another approach adopted by some mortgage holders involves transferring a portion of their mortgage to an interest-only structure. This allows the household to solely cover the accruing interest on that portion, thereby reducing monthly repayments. The survey discovered that 16% of respondents had already taken this step, while 24% were considering it. 

Considering the plight of mortgage holders, several respondents opted to lengthen the term of their mortgage, leading to reduced monthly payments. KPMG's survey found that 12% of participants had extended their mortgage term, while 25% were evaluating this possibility. Alternatively, individuals have taken more drastic measures by selling their current property and moving to a more affordable home. The survey indicated that 8% of respondents had already chosen this route, while 22% were contemplating it. 

Furthermore, the survey revealed that 11% of participants had cut their pension contributions, with an additional 20% considering reducing their contributions as a means to cope with increasing mortgage costs. These findings are part of KPMG's Consumer Pulse research, which tracks the responses of over 3,000 individuals across various age groups, income brackets, and regions in the UK to the ongoing cost of living crisis.

Despite these challenging circumstances, there is a sliver of good news for homeowners and prospective buyers. Recent data from Moneyfacts highlights an increase in the availability of fixed-rate mortgages priced below 5%. This development comes as the Bank of England hints towards a potential pause in their series of interest rate rises, which were implemented as a measure to curb inflation. HSBC recently launched attractive deals with five-year fixed rates starting at 4.9%, while NatWest is set to introduce deals starting at 4.89% soon. Additionally, the average new five-year fixed-rate residential mortgage is slowly approaching a level below 6%. According to Moneyfacts, on Wednesday, the average new deal, covering all deposit sizes, stood at 6.03%, slightly down from 6.04% on Tuesday. 

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In conclusion, mortgage holders are grappling with the reality of higher monthly payments and are taking various measures to manage their finances. From tapping into savings to downsizing their homes, individuals are making tough choices to mitigate the impact of increased mortgage costs. However, amidst these challenges, the availability of fixed-rate mortgages below 5% offers a glimmer of hope for homeowners and prospective buyers.

UK Mortgage Holders Facing Financial Challenges: Survey by KPMG Reveals Adjustments Made

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