The mortgage team at Compare the Market conducted a survey to assess the understanding of various mortgage-related terms among UK residents, and found that 71% believe the topic should be taught in schools.
Among Gen Z participants (aged 16 to 26), 62% thought the mortgage process should be explained at school, while 76% of the Silent Generation (aged 78-plus) shared the same view.
Despite having a mortgage, 16% of respondents admitted to not fully understanding the process.
The most understood term was ‘fixed-rate mortgage’, known by 52% of respondents.
This was followed by ‘stamp duty’ at 47% and ‘mortgage term’ at 46%.
On the other end, ‘lasting power of attorney (LPA)’, was the least understood term, with only 7% familiarity.
‘Standard variable rate (SVR) mortgage’, was understood by 12%, while ‘capital on mortgage’ was recognised by 20% of respondents.
People in Norwich showed the least confidence in understanding mortgages, with 23% admitting they do not fully understand them.
Newcastle had 21% who felt the same, and 19% from London expressed confusion.
The mortgage team at Compare the Market said: “Understanding mortgages is really important because it not only empowers homebuyers to make informed decisions but ensures they select the loan terms that best align with their financial goals.
“With the right knowledge, buyers can avoid common pitfalls, secure the best interest rates, and manage their long-term financial commitments.
“Resources like mortgage calculators, financial advisors and internet resources can help.
“Using these tools and professional advice can significantly improve a person’s ability to achieve and sustain homeownership.”
