66% of young homeowners have 30 to 40-year mortgage terms, Sprive finds
The analysis of more than 190,000 homeowners showed just 6% of those aged 40 to 49 had terms this long, while 42% of those aged 30 to 39 did.
Sprive has found that two thirds (66%) of homeowners under 30 now have mortgage terms of between 30 and 40 years.
The analysis of more than 190,000 homeowners showed just 6% of those aged 40 to 49 had terms this long, while 42% of those aged 30 to 39 did.
As a result, Sprive stated that under-30s are set to be mortgage free at almost 60 years old.
Jinesh Vohra, CEO of Sprive, said: “Longer mortgage terms have become the price many younger buyers have to pay to get onto the property ladder.
“Spreading repayments over 30 or even 40 years can make monthly payments affordable, but it also means paying interest for much longer and staying in debt well into later life.
“The good news is that there are ways to cut the debt; making overpayments, even relatively small ones can shave years off the mortgage and save tens of thousands of pounds in interest.”
Vohra added: “Many people don’t realise how much difference regular overpayments can make.”
On average, Sprive users have a mortgage of £202,000 at a rate of 4.14% over 25.6 years and pay just under £1,100 a month.
Someone with that same balance, term and rate could save more than £10,700 in interest and become mortgage free almost two years earlier by overpaying £50 a month.
Overpaying £100 a month would save more than £19,700 in interest and cut the term by more than three and a half years.
Vohra said: “For those who don’t think they can afford to pay a little more Sprive offers homeowners a way to ‘earn’ overpayments from shopping they are doing already.
“We have deals with 100s of retailers enabling users to earn cashback on everyday shopping – from the weekly supermarket shop, to treats and even holidays.
“Chipping away at the balance early has a much bigger impact than most homeowners expect.”
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