Abacus Daily Debt News

Mortgage repayments should be top priority, expert says

Debtors need to prioritise their mortgage repayments over other household expenses, an expert has suggested.

Responding to recent LV= research that indicated people view burglaries to be a bigger threat than payment problems, editor of Your Mortgage Barney McCarthy stated that, although it is positive that people are “being security conscious”, this should not come “at the expense of missing … mortgage payments”.

“Making your monthly mortgage repayment should be the highest priority on your budget,” he went on to say.

And Mr McCarthy further highlighted the importance of insurance, which “shouldn’t be something you skimp on” when money is less available.

However, this is something that many debtors appear to be doing, with the survey revealing that only 37 per cent of homeowners have insurance policies in place to cover their mortgage payments should their income be reduced.

It was also found that, while 65 per cent believe burglary to be the primary threat to their homes, 49 per cent are concerned about mortgage repayment issues.

A debt management plan is often the best solution for unaffordable mortgage payments as borrows can’t afford both mortgage payments and contractual unsecured credit repayment. A debt mangement plan allows for lower unsecured credit repayments, make the mortgage and any arrears affordable.

By Sarah Adie