Even though more than 20 million people in the UK currently have a mortgage, two-thirds are confused about what a down payment is, and 7 in 10 don’t know what APR (annual percentage) means.
More than half of homeowners did not know what a fixed-rate mortgage is, while 64% did not know what is meant by re-mortgage. Although negative equity and APR scored among the highest: 79% did not know the term negative equity and 77% did not know what was meant by APR!
ABC or APR? the audience has spoken and it appears both! 84% said mortgages would be useful for teaching in school. The average age at which people started learning about mortgages was 23 years. Although almost half wished they started learning about it sooner. According to the new research from firstmortgage.co.uk
While 64% said it would have been helpful to learn about mortgages before applying for one. A third said they would only do “a little bit of research” before applying.
Mortgage expert and compliance director at Firstmortgage.co.uk, David McGrail warns against entering blind.
“Understanding what does and does not belong to a mortgage is crucial when applying for a mortgage. People need to know what mortgage they are getting, how and when it can change, and how much they could pay back in a month. For example, a variable rate mortgage would change with interest rates, while a fixed rate mortgage would not change. Knowing which type is best for you is essential. “
It seems that Brits often don’t know what they are. While 47% know what a fixed rate mortgage is, only 1 in 10 knew what was meant by a variable rate mortgage and only 5% knew what a ‘tracker’ mortgage was.
McGrail continues, “There are so many types of mortgages, while the two main mortgage products are considered fixed and floating rate, there are plenty of others, such as matched mortgages, tracker mortgages, or interest-only mortgages, which may be right for some people. . I would strongly encourage people to do their research and reach out to an advisor to discuss possible options before applying. “
While some may turn to Google for advice, it is important to get personal and professional help in choosing a mortgage that works for you as it can be a complicated world. Advisors can help you understand and understand the complex terms and conditions. help you get the best deal. “