Mortgage holders want to reduce mortgage term

A recent report has shown that many mortgage holders are very keen to reduce their mortgage term by making additional payments.

The research, which was carried out by Intelligent Finance, shows that three quarters of mortgage holders in the UK are keen to reduce the terms of their mortgage, which could mean a huge reduction in interest repayments and the chance to be debt free more quickly.

A third of respondents stated that making mortgage repayments was their main financial concern, and around half of respondents expressed an interest in self service mortgages to help them to clear their mortgage debt more quickly.

According to the report, around half of UK mortgage payers find that their existing mortgage plan is very restrictive, and that there needs to be more flexibility that would allow them to be more in control of their mortgages. Around one fifth of mortgage holders also expressed an interest in reducing their monthly repayments on their mortgage. Surprisingly, around sixty percent of mortgage holders were aware of the total cost of their mortgage over the repayment term.

One mortgage that may be of interest to those interest in reducing the term of the mortgage and repaying it faster, thus saving money on interest, is the offset mortgage, which offsets savings and current account interest against interest on the mortgage, which could ultimately save thousands on the overall amount of interest being paid.

The managing director of Intelligent Finance, Mark Parker, stated: 'We now have a new generation of mortgage holders who view their finances holistically and want more flexibility and the option to pay off their mortgage as soon as possible, rather than go on borrowing into old age.  Offsetting delivers exactly this.  We’re putting mortgage holders firmly in the driving seat, right where they belong.'

Tom Smith
22.04.07

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