Mortgage blog: 18% of borrowers have changed their home loan in the last three years

Posted 19 November 2014

New research has found that almost one in five borrowers has changed their mortgage or rearranged their home loan with their current lender in the last three years. The data from Ocean Finance has revealed that 18% of borrowers have changed their deal since 2011 in an attempt to keep their payments at an affordable level.

With a third of borrowers saying that they would struggle if interest rates were to rise, thousands of people have taken steps to reduce their mortgage repayments.

Borrowers having to find ways of reducing their monthly repayments

The survey by Ocean Finance has revealed that many homeowners are struggling to keep up their mortgage repayments despite record low interest rates. One in twelve people has moved to an interest-only mortgage in the last three years while the same number have extended the term of their home loan.

Moving to an interest only mortgage helps to reduce your monthly repayments but it means that you have to find a lump sum to pay your mortgage off at the end of the term. And while extending the term might have the effect of reducing your mortgage repayments, you will end up paying much more interest overall.

The firm also points out that a longer mortgage term may also mean that you to rethink your future plans, such as working later in life to continue repaying your mortgage, rather than retiring.

“While repossession figures have been low, this has masked the real struggle that many borrowers have had to keep paying their mortgage. As incomes have been squeezed over the past few years, one in six borrowers has had to find a way to reduce their monthly payment,” said Ian Williams, spokesman for Ocean Finance.

The survey found that 3.8% of homeowners had agreed with their lender to make temporary lower payments while 2.3% of homeowners said that they were taking a temporary payment holiday.

“Switching to an interest-only mortgage or extending the term are both being used as a way to lower repayments. While both of these can help provide short-term relief and may serve to keep the roof over people’s heads, it may be that this is simply storing up problems for the future,’ added Williams.

A third of borrowers would struggle to pay their mortgage if rates rise

The Ocean Finance survey comes after an ICM poll found that 32% of borrowers would struggle to carry on paying their mortgage if interest rates rose by 2%. Despite the strong likelihood that rates will rise in 2015, just 14% of respondents as a whole – including mortgage holders, but also other non-borrowers – said that they had been making financial adjustments to deal with any rise.

Keith Osborne, editor of, says: “While many borrowers have changed their mortgage arrangements in recent years it is clear that interest rate rises will still hit million of borrowers very hard. The number of remortgages has fallen in recent months but there are lots of great deals available. I’d advise anyone concerned about the prospect of interest rate rises to speak to get independent advice on their options.”

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