Mortgage borrowers ‘feeling the squeeze’

Mortgage borrowers around the UK are feeling the financial squeeze as rises in the base rate of interest continue to have an impact, according to recent research.

Figures compiled by Alliance & Leicester show that saving rates among people struggling to deal with mortgage-related debt management issues are falling.

In addition, many households with outstanding mortgage arrears are aiming to become debt free and as a result are cutting back on their unsecured borrowing levels, the financial services firm reports.

“Families are cutting back on their borrowing and their saving to help ensure they can afford higher mortgage and other household bills,” said Sean Murphy, director of strategic planning at Alliance & Leicester.

“Their family budgets have been under pressure and they have cut their cloth accordingly,” he added.

Earlier this year, the Consumer Credit Counselling Service forecast that British mortgage borrowers would be “on the rack” financially throughout 2007.