New research from first direct suggests that twice as many mortgage holders save regularly rather than pay down their debt.
A survey of 1,022 UK mortgage holders found that 42% are saving regularly, double the 21% who regularly overpay on their mortgage.
31% don’t know the interest rate on their mortgage, 43% don’t know the total cost of their mortgage including interest, and a quarter do not know whether or not they are able to overpay on their mortgage. reasons first direct suggests for borrowers not overpaying on their mortgage.
It also found that 25% are unaware whether or not they are allowed to overpay on their mortgage, while 15% don’t know the amount outstanding on their mortgage.
While twice as many mortgage holders pay into a savings account as overpay their borrowing, when asked hypothetically how they would use any spare income, the most popular answer was overpaying their mortgage (48%), outstripping paying into savings (42%) and paying off credit card debt (33%).
Research by the direct bank has found that by offsetting their savings against their mortgage debt, the average mortgage holder could reduce their mortgage payments by £28.25 per month while retaining access to their savings.
Richard Tolchard, senior mortgage manager at first direct, said: “People continue to try to put some money to one side and mortgage holders are no different in also wanting to pay down their loan. However