StepChange Debt Charity found that 25% of mortgage holders have used credit to afford their home loan payments, up from 20% in September last year.

It also reveals that average arrears per client stands at £9,657, an increase of 68% year-on-year.

While the Bank of England lowered interest rates today from 5% to 4.75%, YouGov polling commissioned by StepChange confirmed ongoing difficulty for mortgage holders’ finances. 

Among UK adults with a mortgage, 41% have found it difficult to keep up with bills and credit commitments in the last few months.

The poll also found that 25% have used credit to afford their mortgage payments, up from 20% in September last year.

Meanwhile, 16% have used credit, loans or an overdraft to make it through to payday. This compares to 11% of the wider population.

Earlier today, UK Finance revealed the number of homeowner mortgages in arrears are up 8% year-on-year.

The data also shows that the number of mortgage possessions among homeowners are up 39% year-on-year.

Even with today’s base rate decrease, StepChange chief client officer Richard Lane says: “We’ve not seen interest rates come down as quickly as they shot up in 2022 – and as we can see among our own clients in problem debt, this has taken its toll.”

“Thousands of mortgage holders have faced new fixed rate deals over the past year or two with monthly payments eating up a much larger proportion of their income. This has had a knock-on effect on people’s ability to keep up with bills and repay other debts as they prioritise keeping a roof over their head.”

“The effect on private renters can also not be underestimated – many landlords have passed on higher debt servicing costs to tenants, making their rental payments increasingly unaffordable.”