20% worried about meeting mortgage repayments

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by Kay Murchie

The Financial Services Authority (FSA) has announced one in five borrowers are worried about meeting their mortgage repayments in the next 12 months.

Furthermore, a quarter of those do not have any plans for dealing with the issue, the FSA discovered.

Chris Pond of the FSA said economic conditions are getting tougher, putting pressure on household finances.

The FSA is introducing a £2 million advertising campaign to help worried homeowners. The campaign is specifically aimed at those whose fixed-rate deals expire this year. The FSA has warned that 1.4 million short-term fixed rate mortgages are to due to end this year 2008.

However, in spite of the economic turmoil, the rate of loan defaults and home repossessions in Britain has remained low by historic standards, especially compared to the early 1990s.

However, there are concerns that this could change if the global macroeconomic situation and unemployment rates deteriorate.

Hector Sants, chief executive of the Financial Services Authority (FSA), recently said mortgages will be hard to obtain for borrowers with a poor credit rating - even those who have missed one credit card payment.

Earlier this month saw a number of high-street lenders scrap the 100% plus mortgage meaning first-time-buyers will now have to find a deposit.