Homeowners are looking at ways to consolidate their debt and extend the term of their mortgages as rising interest rates start to take hold, new figures reveal.

The latest criteria index from Knowledge Bank highlights the financial burdens that many are carrying in the UK.

As the UK’s largest database of mortgage lending criteria, Knowledge Bank tracks the most frequent searches performed by brokers as they look to place a client’s case.

Knowledge says the findings highlight the pressing need for viable solutions to tackle the affordability hurdles and alleviate the hardships faced by individuals in the present economy.

The persistent trend of ‘missed or late payments’ searches continues for a ninth successive month in the ‘residential’ sector.

Data from the ‘residential’ mortgage sector in June also reveals an increase in searches relating to the ‘maximum age at end of term’ as brokers and lenders explore ways to help borrowers extend mortgage terms or move to interest-only options on a short-term basis.

This was backed up by searches within the ‘second charge’ sector, which Knowledge says shows a surge in individuals seeking solutions to their mounting financial issues.

June also saw an increase in searches for lenders who assist homeowners with ‘capital raising for debt consolidation’.

Knowledge says a search for ‘interest-only mortgages’ coming into the top five for the first time since June last year shows the pressure people are under to make their debt more affordable.

In the ‘equity release’ category, June searches indicate a notable resurgence in interest for ‘leasehold remaining term,’ ‘early repayment charges,’ and ‘ex-local authority houses’.

A new term coming into the top five this month was whether lenders would offer buy-to-let mortgages to ‘first-time buyers’.

Knowledge says this shows the ‘significant challenge’ faced by aspiring owners who potentially can’t afford to buy a home so want to get onto the property ladder through buy-to-let (BTL) instead.

It adds that these trends signify a growing demand for solutions to address financial difficulties and consolidate debts among homeowners.

In comparison to the challenges in the residential and BTL markets, both bridging and commercial were consistent, with the same top five searches for the past three months – both leading with ‘minimum loan amount’ and ‘maximum LTV’.

Knowledge Bank chief executive Nicola Firth says: “Amidst the mounting financial challenges faced by borrowers, many are desperately seeking assistance with their mortgage terms and additional borrowing for debt consolidation.

“Brokers are exploring options to ease their clients’ financial situation. For borrowers transitioning from a fixed-rate, the prospect of moving to a significantly higher rate is particularly onerous.

“Broker searches on Knowledge Bank evidence that borrowers are resorting to every possible means to find solutions for their clients.

“Considering ways to extend mortgage terms, exploring second charge interest-only options, and using second charges to raise much-needed capital for debt consolidation.

“The crucial role of brokers in assisting both existing and prospective borrowers has never been more important.”

During the first quarter of 2023 there were over 280,000 searches on Knowledge Bank and over five million criteria searches have been carried out to date.