Mortgage arrears 'can be avoided'

Homeowners can avoid mortgage arrears by budgeting carefully, it has been advised, after the Bank of England announced its decision to cut interest rates by 0.25 per cent.

The monetary policy committee's decision to take the cost of borrowing to five per cent was welcomed by price comparison website uSwitch.com, which described the move as a "small ray of hope".

However, the financial advice resource also warned that the average consumer's monthly outgoings are unlikely to be made substantially easier by the rate cut.

In order to avoid mortgage arrears and other household debt, Britons were told to ensure they adopted a measured approach to their finances.

"While all this is going on it's very easy for consumers to feel helpless. But, in fact, we can all help ourselves by taking a good look at our household budgets to see where we can cut costs," said Ann Robinson, director of consumer policy with the site.

According to Fool.co.uk, most lenders are unlikely to pass on the full base rate cut to borrowers.

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