Financially stretched pay mortgages by credit card
by Gill Montia
Shelter, the charity for the homeless, has been investigating the use of credit cards for the payment of mortgages and rent.
According to the charity one million householders are using their credit cards in this way, with many first-time buyers doing so to remain on the housing ladder.
In a poll of 2,000 households conducted by YouGov, almost 8% of respondents aged between 18 and 24 admitted they had used credit for housing in the past 12 months.
Adam Sampson, Shelter’s chief executive believes that: “For many people trying to keep a roof over their head, desperation is driving them to short-term, high-cost borrowing”.
Most credit cards charge interest rates of between 15% and 18%, almost 50% higher than the most expensive sub-prime mortgage interest rates, which are around 12%.
The national average for people using credit to keep a roof over their heads is 6% and according to the survey, the situation is at its worst in the Midlands and Wales, where one in 10 people say they have used credit in this way over the past 12 months.
Northern England and London are closer to the national average, whilst in Scotland the figure stands at 3%.
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