New research by The Co-operative Bank Mortgages reveals that almost two thirds of mortgage holders (62 per cent) are aiming to be mortgage-free by the time they reach 50 years of age.
The findings reveal how paying off the mortgage would change people's lives with over half of people (52 per cent) stating that they would take more holidays, just under a third of people would turn their attention to saving more for retirement (31 per cent) and a quarter of people would look to change their working lives by either finishing work or moving to part time hours (27 per cent). What would you do if you were mortgage-free per cent of respondents 1.Go on more holidays 52 per cent 2.Save more money for retirement 31 per cent 3. Eat out more 28 per cent 4. Work part-time / Finish working 27 per cent 5. Travel the world 19 per cent 6. Buy more expensive cars 13 per cent 7. Help pay for children's weddings 10 per cent 8. Change career 10 per cent 9. Give more money to charity 10 per cent 10. Start a business 7 per cent As a result many people have been making mortgage overpayments, with the top reason cited for this to reduce the term of the mortgage (31 per cent). Other people are looking to take advantage of the low interest rate environment (21 per cent), and the fact that they have more disposable income as a result of reductions in their mortgage rate (13 per cent). James Hillon, head of mortgages at The Co-operative Bank, commented, "The research clearly shows that many mortgage holders are looking to take advantage of the low interest rate environment by making overpayments. Since the launch of our capital repayments pilot scheme we have had a significant interest from customers and as a result we are continuing to monitor the scheme in detail, with a view to looking at rolling out the scheme to more customers if successful."
At The Co-operative Bank currently most customers within their initial mortgage deal period are allowed to make overpayments of up to 10 per cent of their mortgage balance per year, without any penalties, and customers on lifetime trackers and standard variable rates have no restrictions on overpayments.
At the end of last year, The Co-operative Bank launched a pilot scheme, offering customers who have already made significant overpayments, the option to make additional capital repayments of up to 50 per cent of their entire mortgage without penalty**. Building on these findings and to start off this new financial year, The Co-operative Bank Mortgages has refreshed the amount available for customers included in its capital repayment pilot scheme with an additional 50 per cent available for 2010. This means that those people who have already made capital repayments in the December launch of the scheme will now have an additional 50 per cent limit for the year ahead.
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Date: 17th, February, 2010 |
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