The Money and Mental Health Policy Institute, which was founded by journalist and money saving expert Martin Lewis, is calling on lenders to proactively identify and reach out to customers who are struggling with repayments following the publication of its research.
The study found as many as three in ten mortgage holders had mental health problems. And it is these homeowners who have struggled the most to cope with the impact of rising interest rates which sent mortgage repayments rocketing over the last year.
Indeed, these homeowners, the report revealed, were more likely to have cut back on food, energy and other essentials like medicine to keep up with increased mortgage costs. They were therefore at greater risk of falling behind on bills compared to other homeowners.
What’s more, the report identified, many were also struggling to access vital support from lenders to help with mortgage difficulties.
In fact, 70% of those quizzed in a YouGov poll of 2,150 UK adults said they did not know about the Mortgage Charter – an agreement which most lenders have signed which obliges them to find practical solutions for those who cannot afford repayments.
Worrying, a similar percentage thought their lender had not done a good job of communicating the support available.
Ultimately, the charity believes lenders needed to focus more on identifying and reaching out to those people who were at the most risk of facing the worst impacts of rising interest rates.
Conor D’Arcy, chief executive of the Money and Mental Health Policy Institute said: “When you’re struggling with your mental health, simple tasks like cleaning your teeth can be difficult, never mind picking up the phone to tell your lenders that you don’t know how you’re going to afford your next payment.
“It’s crucial that mortgage lenders understand these practical challenges, identify those at risk and reach out to them through a channel that suits them.
“Doing that would make a huge difference in reducing the stress that can come with mortgage difficulties, and help people experiencing poor mental health to get the support they need.”
The psychological toll of rising mortgage rates
It also emerged through the research how some mortgage borrowers who were facing repayment struggles had received intimidating letters, phone calls and messages, which increased their levels of distress.
The charity said difficulty maintaining mortgage payments was an inevitable source of stress and anxiety.
However it was concerned, that for some, the psychological toll was extreme, and was being made worse by actions from creditors.
Its message was clear – that urgent action from lenders was needed to help more homeowners avoid distress and financial harm.
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How lenders could help people with mental health problems
Here’s what Money and Mental Health wants mortgage lenders to do in order to increase awareness of the support available and to better meet the needs of people with mental health problems in mortgage difficulty:
- Be more proactive in informing and reminding customers of the support on offer, utilising customer data where possible to identify and target customers most at risk of experiencing payment difficulties.
- Ensure that all customer-facing staff are trained in how to support people with mental health problems and the practical adjustments they may require, such as spending more time making sure they understand information or providing written summaries following discussions with lenders.
- Make support easier to access, for example by routinely recording customers preferences around communications channels and using their preferred channel when reaching out with support
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What do if you are falling behind with your repayments?
If you are facing similar difficulties to those described in this article there is help available, even if it might not seem to be the case. You can contact your lender who should be able to provide you with an alternative payment option which can be used in the short term whilst you get back on your feet.
You can read our article here which explains what lenders can do to help.
If you feel you cannot face calling your lender, you could speak to a trusted friend or family member and ask for their support in making contact with your lender. Reaching out to speak to someone is often the biggest and most important step you can take in getting back on your feet.
You can also contact one of the debt charities to help you. Try StepChange, National Debtline or Citizen’s Advice.
