WASHINGTON – Faced with higher interest rates, high debt levels and higher energy costs in a housing market seeing flattening home prices, Fitch Ratings says mortgage delinquencies among homeowners with high-cost loans will rise 10-15% in 2006. That of course means, the Fitch report states, that overall mortgage delinquencies are likely to rise next year as well. Fitch Managing Director Glenn Costello said “borrowers will be under more stress and have more propensity to be delinquent.” Most high-rate mortgages have adjustable interest rates, which means borrowers are more sensitive to rate fluctuations. Fitch estimates about 19% of home loans in the U.S. are subprime. In addition, many homeowners have used the equity in their homes to pay off high-interest credit cards, thereby reducing their monthly obligations. But those consumers with poor credit have done so by shifting to subprime loans. Exacerbating the situation is the fact that many subprime loans come with prepayment penalties that make it too costly for borrowers to refinance. The increase in subprime lending, said Costello, means more people could come under financial pressure than in the recent past when home values were rising.