New research from unbiased.co.uk, the professional advice website, reveals that of the 11.2m households in the UK with a mortgage, an astonishing 1 in 7, (1.6 million)* are simply paying off the interest each month and not repaying capital or saving anything towards paying off their mortgage debt in the future.
“With incomes squeezed, it’s not surprising that many people are trying to save money by sticking to interest only mortgages, but this is a potential ticking time bomb” said Karen Barrett, chief executive at unbiased.co.uk.
She added: “What is really worrying is that almost a third of this group (32%) are either in or coming up to retirement age (55+) while more than half are between the ages of 35 and 55 (53%). Many will be forced to downsize or continue to pay large mortgages well into retirement, when income is tighter than ever. The goal of becoming ‘mortgage free’ is becoming ever more elusive for some.”
In addition, with lenders now clamping down on interest only mortgages, and slashing Loan-to-Value requirements to around 50% - 60%, many people currently on interest only deals could easily find that no similar options will be available to them when they come to remortgage in the future.
“To avoid any kind of payment shock when you remortgage and to ensure you have paid a considerable chunk of your mortgage off before you retire, it is vital to see a whole of market mortgage adviser. They will be able to help you get the best mortgage deal possible which matches what you can afford or talk you through the options for a repayment plan ensuring that you are fully prepared financially for your future.
“Consumers looking to find a whole of market mortgage adviser can carry out a free and confidential search at www.unbiased.co.uk. A whole of market mortgage adviser can give specialist advice on mortgage products from across the whole of the market, rather than just a selection of providers.”
Notes to editors
Research based on Opinium Research results, 2010 online interviews, from 21st February – 23rdFebruary 2012 (nationally representative)
*11.2m households in the UK with a mortgage according to ONS. 24% of these have an interest only mortgage and 58% of these have no repayment savings according the Opinium research.
11200000/100x24 = 2,688,000. 2,688,000/100x58 = 1,559,040
For more information contact:
Lisa Grando/ Emily Falla/ Maddy Morgan Williams, Lansons Communications: 020 7294 3682
For expert commentary or case studies from over 190 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook.
About unbiased.co.uk, the professional advice website
The unbiased.co.uk portal is a free and confidential UK-wide search matching consumers with local professional advisers: ‘find an IFA’, ‘find a mortgage adviser’, ‘find a solicitor’, and ‘find an accountant’. These searches enable consumers to find professional advisers by postcode, area of specialism, qualification and payment method. In 2011, unbiased.co.uk fulfilled around 450,000 searches for local, professional advice.
Unbiased Ltd promotes the benefits of independent financial advice to consumers. Unbiased Ltd is supported by the following companies:
Unbiased Ltd - Registered Office: 12-14 Berry St, London, EC1V 0AU. Registered in England: No. 06775878