A third of current mortgage holders say their mortgage repayment age will be older than they initially expected, according to new research.
New data shows that as people get older, they become more realistic about the date in which they’ll pay off their mortgage.
The average 18 to 34-year-old believes they’ll be mortgage free by 51. 35 to 54-year-olds think it will be paid off by 58 and those aged 55 and over predict they’ll be borrowing into retirement age before finally paying off their debt at 68.
Just 8% of those aged over 55 believe they’ll never be mortgage free.
Almost a third (32%) of women say that the financial demands of supporting a family is the main reason they’ll pay off their mortgage later than planned, while just 24% of men feel the same way.
Of those who say they’ll still be paying their mortgage after 65, almost two thirds (65%) of women said they didn’t have a plan to become debt-free sooner, compared to half of male respondents.
So how can mortgage holders achieve their dreams of becoming mortgage free sooner than their mortgage term currently dictates?
Overpayments are one of the most flexible solutions. By making regular monthly overpayments or putting lump sums towards their mortgage debt during times of financial abundance, mortgage holders can pay off the equity in their home sooner than originally anticipated and reduce the amount of interest paid over the course of their mortgage deal.
Remortgaging can also help, though this option tends to require more commitment.
For example, a homeowner could remortgage their property in a bid to reduce their interest rate, save money on interest, and use the money saved to pay off more capital. Alternatively, the homeowner may choose to remortgage their home to a shorter term - say from 35 years to 30. This may result in larger monthly repayments, but the debt will be paid off faster and the amount of interest will fall too.
If you’d like help becoming mortgage-free sooner, please get in touch with the team at TaylorMade.
