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Alarm over mortgage payment survey
Friday March 12th 2010
A credit reference agency has been left "extremely alarmed" after new statistics revealed that a quarter of homeowners would struggle to meet their mortgage repayments if their monthly income dropped by just £300.
According to Callcredit Information Group around 26% of people could be forced to default on their mortgage if their monthly earnings were reduced by this amount.
The findings highlight the need for income protection insurance, which can guard against such problems.
The results also showed that 6% of people attempted to gain more credit despite knowing that meeting the repayments would be difficult, while 9% knowingly inflated their income on applications for credit in order to gain a raised limit.
Around 35% of people paid off their credit card bills in full each month, with 5% of those questioned admitting they used to do this but now made only the minimum repayment or repaid a fixed amount each month.
The research found that people aged between 35 to 44, typically families with young children, were particularly likely to have applied for credit knowing they might not be able to repay it at 10%, while 13% overstated their income when applying for credit and 7% stopped repaying their credit card in full.
Graham Lund, managing director of Callcredit Information Group, said: "These statistics are extremely alarming."
Copyright © Press Association 2010
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