A recent survey conducted by Uswitch.com mortgage has revealed that young adults are unfairly impacted by the state of the mortgage market.
The report, which surveyed over 2,000 UK homeowners, discovered that 18-24 year olds spend on average £1,390.90 a month in mortgage repayments, the highest of all age brackets.
This is 59% more than 25-34 year olds, where the average monthly payment is £874.35 and the second most expensive repayment. Additionally, 0.99% of 18-24 year olds have monthly repayments exceeding £3,000.
The survey also found that 25-34 year olds have the longest mortgage terms on average at almost thirty years, with 57.25% of homeowners in this age bracket having a mortgage term of 30 years or longer.
In comparison, the average length of a 55-year-old’s mortgage is just 22.73 years. The report suggested that the recent introduction of 50-year mortgages in the UK may result in an increase in mortgage terms for younger age brackets in the future.
While fixed-rate mortgages are the most popular across all age brackets, they are utilised far less by 18-24 year olds.
Tracker mortgages are much more popular for younger homeowners, potentially resulting in larger bills than anticipated due to the recent increase in interest rates by the Bank of England.
The report suggests that the increase in house prices, which have tripled in the past 20 years, is likely a major factor in young people paying higher mortgage repayments.
Young people may be opting to pay a smaller deposit, resulting in higher mortgage repayments in the future. The report also highlighted that young homeowners are having to watch the market closely to find a new mortgage term that is a good fit.
Many young homeowners are taking steps to save money, such as cutting back on luxuries and moving back in with parents to save up for a deposit and mortgage payments.
The report recommends that young homeowners stay up-to-date with the market to ensure they are getting the best deal possible.
