Mortgage holders face average shortfall of £150 a month as high interest rates bite

Increasing numbers of mortgage holders helped by Citizens Advice are unable to make ends meet as their essential costs soar and interest rate rises start to bite.

Mortgage holders who’ve had detailed budgeting help as part of Citizens Advice’s debt advice process have gone from being one of the most protected groups to facing a negative budget - meaning they don’t have enough to cover their essential costs, such as housing, food and energy bills. 

In 2019 mortgage holders had a £61 surplus after covering essential bills, they now face a £147 a month shortfall, figures from the latest Citizens Advice cost-of-living dashboard show. 

Some groups of mortgage holders coming to Citizens Advice for debt advice are shouldering greater negative budgets than others as soaring interest rates compound existing cost-of-living pressures and structural inequalities. People of colour (£276), single parents (£182) and disabled people (£164), are all experiencing bigger shortfalls than others.

Citizens Advice analysis also shows the number of mortgage holders it’s helping with crisis support - food bank referrals and emergency charitable grants - has increased by 177% between the six months of 2020 and the same period in 2023 (1,521 to 4,215).

The ripple effect

As more mortgage holders seek support, Citizens Advice is also helping record numbers of private renters with homelessness and with Section 21 ’no fault’ evictions. A trend which suggests landlords may be selling their properties due to increasing costs or hiking rents to unaffordable levels. 

With housing costs pushing increasing numbers of people into the red across the spectrum, Citizens Advice is calling for a small targeted fund for mortgage holders on low incomes who are at real risk of losing their home. The charity is also urging the government to bring forward the long-awaited Renters Reform Bill and give renters the protection and improved rights they desperately need.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“People who can’t cover their essential bills risk being sucked into a spiral of debt. 

“Our latest analysis is a sobering reminder that, despite cutting their spending back to the absolute minimum, too many people are simply living on empty.

“The government must look at ways of preventing mortgage holders and renters from falling further into the abyss.”

Notes to editors

1. Citizens Advice’s next cost of living data dashboard event will take place at 1.30pm on Monday, July 24th - you can sign up to the online event here.
2. Citizens Advice cost of living data dashboard can be viewed here.
3. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
4. Our network of charities offers impartial advice online, over the phone, and in person, for free.
5. Citizens Advice helped 2.55 million people face to face, over the phone, by email and webchat in 2021-22. And we had 40.6 million visits to our website. For full service statistics see our monthly publication Advice trends.
6. Citizens Advice service staff are supported by more than 18,500 trained volunteers, working at over 2,500 service outlets across England and Wales.
7. You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.