August 2017 revealed the amount outstanding debt on an average mortgage in the UK was £121,678, according to October Money Statistics produced by Money Charity.
Due to a growth in house prices and a decline in the number of mortgages that have been settled, this has been the largest amount of mortgage debt recorded.
In 2013 the figure stood at £109,487 and the increase is being blamed on the rate of increasing house-prices and longer-term mortgages to cover larger loans. Standard mortgage terms of 25 years are increasingly becoming 35-years, as seen in the last 15 years or so.
In addition, borrowers are borrowing 3.63 times what they are earning and wages have not kept up with the cost of living which has resulted in mortgage debt rising. The situation is further compounded by rumours of an interest rate rise which could make it harder for households to pay off their mortgages.
The number of mortgages that are in arrears is about the same and payments for loans that are in arrears have risen in the last year.
Steph Hayter, Acting Chief Executive of The Money Charity says: “The rising amount we owe on mortgages should be a concern to all of us. As interest rates seem likely to rise, people may soon begin to feel the effects on their wallets.
“Those with large outstanding debts, especially people with variable rate mortgages, should prepare for a time in the near future where monthly repayments will be higher.”