Homeowners in the North are hit hardest by higher mortgage costs and the number of payment arrears is increasing

New research shows that homeowners in parts of northern England are more than twice as likely to fall behind on their mortgage repayments as homeowners in the south.

With interest rates rising sharply from record lows in recent years, mortgage arrears have risen steadily, according to an analysis of Financial Conduct Authority data by longer-term lender April Mortgages.

According to FCA figures, there are more than 115,000 British borrowers who are at least two months behind on their monthly payments.

It found that the Northeast has the highest percentage of borrowers who have missed at least their last two mortgage repayments.

As many as 1.76 percent of all mortgage providers in the region are in arrears. This is followed by the North West, where 1.6 percent of borrowers are in arrears.

Mortgage arrears occur when people fall behind in repaying their mortgage.

Total payment arrears rose to £21.9 billion, according to Bank of England figures released last month, which is 32 percent higher than a year ago and the highest since 2014.

Mortgage arrears are much lower in southern parts of England, FCA figures show.

This is despite the fact that the average property price is higher, which in turn often leads to higher mortgages.

For example, according to UK Finance, the average new mortgage amount for a home in Northern England is currently just £160,000.

In the South West the average new mortgage is just £230,000 and in London £400,000.

Falling behind: more than 115,000 mortgages are at least two months behind in payments, according to analysis of FCA data by longer-term lender April Mortgages

“The number of UK homeowners in arrears is increasing and these latest figures show clear evidence of a north-south divide,” said Rachel Hunnisett, mortgage distribution director at April Mortgages.

‘Homeowners in parts of northern England and Wales appear to have been disproportionately affected by the combination of rising costs of living and higher mortgage rates.’

‘Although inflation has fallen this year, the cost of living is still rising and households without spare disposable income or significant savings to fall back on are finding it more difficult to keep up with their mortgage repayments.’

While the lowest mortgage rates are currently just under 4 percent, mortgage rates peaked last year, meaning some unhappy borrowers will currently have interest rates above 6 percent.

Even today, many people who buy or remortgage will find themselves getting interest rates of around 5 percent or higher, especially those with lower credit scores.

According to Moneyfacts, the average five-year mortgage rate across the market is currently 5.09 percent, while the average two-year mortgage rate is 5.41 percent.

This means that the average borrower who commits for five years with a 25-year repayment term can get monthly payments of £1,180 per month.

Rachel Hunnisett of April Mortgages added: ‘Interest rates may have peaked, but many homeowners are paying more for their mortgages than in recent years, and this is putting more stress on borrowers.

‘If you’re concerned about rising interest rates, choosing a longer-term mortgage can provide peace of mind and financial stability.

If you hold for longer, your monthly payments will remain predictable no matter how the market fluctuates.

‘If someone is struggling to keep up with their repayments, talk to your lender as early as possible about the options you have to reduce the risk of late payments.’