Homeowners are starting to consider solutions such as downsizing, taking on lodgers and extra work to deal with their rising monthly mortgage costs, a new study has highlighted.

Research from the The Mortgage Lender (TML) revealed that 45% of borrowers said they either have or are considering paying an early repayment charge (ERC) on their mortgage deal in or to fix to a reduced rate.

Of this, 7% of borrowers said they have already paid an ERC in order to get a fixed mortgage deal to mitigate a rise in mortgage costs. TML’s research found that 13% of borrowers said they will do this, while a further 25% say they are considering it.

However, TML also highlighted that this could mean they are fixing onto a higher rate than necessary when mortgage rates are predicted to slowly come down in the next few years.

Previous research from TML found that half of homeowners with a fixed, tracker or discount mortgage are on deals that need to be renewed within the next two years. These findings also showed that 25% of those who are expecting their mortgage costs to go up believe it will increase by an average extra cost of £441 a month.

According to the latest study from TML, which was based on a study among 2,000 UK adults, the lender stated that 19% of borrowers have said they are already cutting back on spending in order to save for or pay increased costs, while a further 27% say they will do this, and 30% are considering doing so.

Other homeowners are looking into options to boost their income to afford rising costs. The latest TML research found that 10% of homeowners revealed they have taken on extra work in order to afford their mortgage costs, with a further 18% planning to do so and 29% considering it.

Taking in lodgers is another route borrowers are considering in order to bring in additional funds, with 7% saying they have already done this, 10% indicating they will take on lodgers in the future, and 16% considering it.

Downsizing or selling is another option homeowners are considering. For this option, 10% of respondents admitted they will be downsizing in order to reduce costs, and 20% said they are thinking about it.

TML head of sales, Steve Griffiths, commented: “It can’t be denied that the cost of living and rising costs are starting to bite, so it’s not surprising that borrowers are looking for ways to save their money. What’s vital is that they seek advice from a professional before making any changes.

“Encouragingly, we are seeing many people speaking to their brokers or planning to do so. Brokers play a pivotal role in supporting consumers make one of the biggest financial decisions in their lives and can help navigate the market to find the best possible deals that suit individual circumstances and factor in true costs.”

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