Mortgage holders cut other borrowing and saving
Published On 22 October 2007
Families with mortgages are cutting down on other borrowing and saving, a new report has found.Alliance & Leicester found that mortgage borrowers are coping with rising interest rates by reducing borrowing on things like credit cards.
Furthermore, the data shows that people with mortgages are saving less than they have previously. In January 2006, the average person with a mortgage put away 64 per cent of the typical savings of homes with no mortgage to pay.
Now, this proportion has dropped to just 48 per cent.
"Families are cutting back on their borrowing and their saving to help ensure they can afford higher mortgage and other household bills," explained Sean Murphy, director of strategic planning at Alliance & Leicester.
"Even though average interest rates on unsecured borrowings have actually fallen over the last 12 months that has not been enough to tempt mortgage borrowers to take on more unsecured debt.
"Their family budgets have been under pressure and they have cut their cloth accordingly."
The study also found that mortgage holders said that they are 50 per cent more likely than the general population to reduce their credit card and other unsecured borrowing over the next six months.
