Almost two million Britons have had to take out a loan to meet their mortgage or rent as the cost of living continues to rise, according to Moneysupermarket.com.
With an estimated £30bn worth of fixed rate mortgages due to expire before the end of July, Moneysupermarket.com says the situation is likely to get worse.
Research reveals around 1.8 million households, 7%, have had to take out unsecured loans to meet their rising mortgage or rent, while 2.3 million have had to increase spending on their credit cards.
Tim Moss, head of loans and debt at Moneysupermarket.com, comments: "It's a very serious situation when you have people turning to a short-term solution to fund a long-term product.
“Having a roof over your head has to be your top priority but to be funding that with a loan you might default on or with a credit card that will eventually charge you interest of over 15% isn't the solution in the long term.
“Approximately 4.1 million households have fallen into this trap in the past year - and it needs to be remembered that taking out a loan specifically for a mortgage goes against lenders' rules.”
The news comes as mortgage lenders told the Bank of England they are unlikely to relax their lending criteria for at least the next three months.
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