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).
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.
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."
