A recent survey conducted shows big differences between how different generations handle their mortgage affairs.
Homeowners aged between 19-34 were more likely to hold a repayment mortgage (92%) than their over 55 counterparts (68%). Being on a repayment mortgage means that the size of the 19-34’s mortgage is gradually decreasing whereas 32% of over 55’s are only paying interest from their mortgages. This could potentially lead to a lack of funds in future if the choice of repayment vehicle has not performed, which is a high possibility given how low interest rates have been for so long.
The study also shows that 19-34 year olds were more likely to select a fixed rate mortgage, 69% to 35% of those aged 55 and over. It is believed this could be due to the extra security fixed rates can offer to help with budgeting.
Another difference highlighted by the study is that of re-mortgaging. The younger age group are the most likely of all to re-mortgage, with 34% stating the reason for doing so was to search for lower monthly repayments.
Although a reason for all of the above could be that the monthly repayment for 19-34 year olds is £908 compared to £430 for those above 55 thus trying to ensure they can continue to make the repayments, it is possible for all homeowners to follow the younger generations lead to cut their own costs down. In fact, with mortgage rates still so low, it is possible that everyone could benefit from exploring re-mortgaging options particularly for those on interest only and their lenders Standard Variable Rate.
If you are interested in exploring your mortgage options and would like to seek advice, please do not hesitate to contact us via our Facebook page , or alternatively, you could use our contact us page.