Thousands of households can get help with mortgage bills as 356,000 to fall behind on payments – how to get support

House resting on calculator concept for mortgage calculator, home finances or saving for a house

THOUSANDS of households can get help with mortgage bills as 356,000 are expected to fall behind on payments this summer.

Thousands are battling to pay their home loans amid spiralling interest rates.

There are ways to get help if you’re struggling to pay your mortgage

The average two-year fixed rate in December 2021 was 2.34%, but by December 2022 it had reached 5.84%.

It followed the disastrous mini-Budget in September which caused mortgage rates to shoot up to a 14-year high.

At this point, experts were forecasting rates would rise to 6% in 2023.

This alarming forecast has been scaled back now.

Last month, the Bank of England raised its base rate from 3.5% to 4%, which is expected to peak at 4.5% before falling to 3.25% over the next three years.

But homeowners will still be hit, as when rates go up, banks usually increase how much they charge on loans and mortgage repayments.

New figures predict households will struggle to pay their way this year.

In June last year, 200,000 were in a payment shortfall, according to the Financial Conduct Authority.

But it is expected an extra 356,000 will be struggling to pay by June this year.

Borrowers on fixed-rate mortgages have been cushioned from the immediate impact of rising rates so far.

But those coming off a cheap fix will still face a hike to their monthly payments.

How to get help with your mortgage bill

As soon as you think you will have a problem with your monthly mortgage repayment – whether you can’t pay anything, can’t pay all of your monthly payment or can’t pay it on time – get in touch with your lender straight away.

They have certain schemes in place to help you if you’re struggling.

You can ask your lender about the breathing space scheme if you’re finding payments unaffordable.

Under the breathing space scheme, none of your debts will earn interest and no fees will be added for 60 days.

You’ll be protected from debt collectors and bailiffs.

But it is not a payment holiday – so you will have to continue paying your contractual mortgage payment.

It will help you get on top of your arrears, get help with your debt, and come up with a repayment plan.

You may be able to apply for a payment holiday – this is when you don’t need to pay anything.

But interest and charges may continue to be added, and missed payments will need to be made up in the future.

If you’re on Universal Credit, you may be eligible to claim help with your mortgage interest payments under the Support for Mortgage Interest (SMI) scheme.

Be aware that this is a loan that you will need to repay with interest when you sell your home.

You’ll get help paying the interest on up to £200,000 of your loan or mortgage.

But you’ll only get up to £100,000 if you’re getting Pension Credit.

The interest added to the loan can go up or down, but the rate will not change more than twice a year – the current rate is 3.03%.

You should also make sure you check if you’re missing out on any benefits you are eligible for.

Entitledto’s free calculator works out whether you qualify for various benefits, tax credits and Universal Credit.

Use Policy in Practice’s calculator to not only find out which benefits you could receive but also to find out how much cash you’ll have leftover each month after paying for housing costs.

Charity Turn2Us’ benefits calculator works out what means-tested benefits you might be entitled to, as well as whether you qualify for carers allowance.

Groups like Citizens Advice, StepChange and National Debtline can help you manage your debt.

You should always have a look at what free options are available for managing debt before you turn to a private firm for support.

The FCA said consumers can get free and impartial advice from the MoneyHelper website or by telephone on 0800 138 7777.