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Homeowners relying on current ultra-low mortgage repayments to make ends meet could be facing financial meltdown when their present tracker deals expire, warns debt solution website IVA.com.

“The ever-decreasing base rate has brought huge relief to a great many borrowers with tracker mortgages that fell in line with the rate cuts,” says IVA.com director Terry Balfour.

“Many have seen their mortgage repayments slashed to exceptionally low levels and have found themselves hundreds of pounds better off every month.

“For those who were finding it a struggle to manage financially last year, this aspect of the Government’s emergency economic strategy has provided an invaluable lifeline.

“But unfortunately nothing lasts forever and when borrowers come to the end of their current tracker deals there is very little hope that they will be offered anything that comes close.”

Northern Rock may have now re-entered the mortgage market but times have changed and the days of rock-bottom deals are gone. Of course rates are still relatively low compared to years gone by but they aren’t any match for the ultra-low tracker deals currently being enjoyed.

“It may seem harsh to disturb the relative peace that a lot of homeowners are currently enjoying but the fact is that this situation is temporary and it will come to and end,” says Balfour.

“Those who don’t face the future and plan ahead are in for a nasty and inevitable shock.”

This is especially true for the thousands of people have been affected by redundancy. They may have been able to manage on one income or on the salary of a less well paid job because their mortgage costs have fallen to a manageable level, but a new mortgage deal could prove impossible to cover on this reduced budget.

For example, for a £125,000 interest only loan tracking the base rate at +0.99%* the monthly repayments would have been around £625 when interest rates were at their 2008 peak of 5.25 per cent last February.

But with the base rate having crashed to its current level of just one per cent this repayment will have shrunk to around just £200 per month, leaving the homeowner with a very handy £400 extra every month. That goes a long way towards keeping up with other debt repayments or just covering essential household costs such as utility and grocery bills and without that cushion, tough times lie ahead.

“The only way to deal with this inevitable situation is to plan ahead now,” says Balfour. “The thought of curtailing spending or putting away small amounts of money now may seem like a miserable idea but the benefits will be put into perspective when the sudden hike in mortgage repayments hit.

“So many of the people who contact IVA.com for help with their unmanageable debts have got to where they are now by sticking their head in the sand and refusing to acknowledge they have a problem.

“I urge anyone who is likely to find themselves in this situation in the coming months to be realistic about the future and act now to protect themselves from more hard knocks to come.”

IVA.com offers truly independent, unbiased guidance and is the first port of call for applicants looking for help with debt management. There are nearly 1,000 firms providing IVAs, debt management plans and bankruptcy listed on the company’s database, covering the whole of the UK.

This service enables consumers to read candid reviews of insolvency practitioners by current and past clients so that they can make informed decisions on which IP they believe is most likely to be able to provide the service they want and need.