Two thirds of people aiming to be mortgage free by age fifty

February 16, 2010

New research by The Co-operative Bank Mortgages reveals that almost two thirds of mortgage holders (62%) are aiming to be mortgage-free by the time they reach 50 years of age.

The findings reveal how paying off the mortgage would change peoples lives with over half of people (52%) stating that they would take more holidays, just under a third of people would turn their attention to saving more for retirement (31%) and a quarter of people would look to change their working lives by either finishing work or moving to part time hours (27%).

 

What would you do if you were mortgage-free % of respondents
1. Go on more holidays 52%
2. Save more money for retirement 31%
3. Eat out more 28%
4. Work part-time / Finish working 27%
5. Travel the world 19%
6. Buy more expensive cars 13%
7. Help pay for children’s weddings 10%
8. Change career 10%
9. Give more money to charity 10%
10. Start a business 7%

 

As a result many people have been making mortgage overpayments, with the top reason cited for this to reduce the term of the mortgage (31%). Other people are looking to take advantage of the low interest rate environment (21%), and the fact that they have more disposable income as a result of reductions in their mortgage rate (13%).

At The Co-operative Bank currently most customers within their initial mortgage deal period are allowed to make overpayments of up to 10% of their mortgage balance per year, without any penalties, and customers on lifetime trackers and standard variable rates have no restrictions on overpayments.

At the end of last year, The Co-operative Bank launched a pilot scheme, offering customers who have already made significant overpayments, the option to make additional capital repayments of up to 50% of their entire mortgage without penalty*. Building on these findings and to start off this new financial year, The Co-operative Bank Mortgages has refreshed the amount available for customers included in its capital repayment pilot scheme with an additional 50% available for 2010. This means that those people who have already made capital repayments in the December launch of the scheme will now have an additional 50% limit for the year ahead.

James Hillon, Head of Mortgages at The Co-operative Bank,comments, “The research clearly shows that many mortgage holders are looking to take advantage of the low interest rate environment by making overpayments. Since the launch of our capital repayments pilot scheme we have had a significant interest from customers and as a result we are continuing to monitor the scheme in detail, with a view to looking at rolling out the scheme to more customers if successful.” 

For further information please contact

Catherine Laycock / Alejandra Solis
The Co-operative Financial Services Press Office
Tel: 0161 903 3833 / 3808
Email : catherine.laycock@cfs.coop / alejandra.solis@cfs.coop

Notes to Editors

For media purposes only

*Research carried out in January 2010 by onepoll.com on behalf of The Co-operative Bank amongst a geographically representative sample of 2,000 adult respondents.

The minimum capital repayment that will be accepted is £500. Eligible customers will be contacted to inform them of the full details. These capital repayments sit outside the normal overpayment scheme, and will offer a permanent reduction in the capital outstanding, immediately reducing the outstanding balance of the mortgage.  

About overpayments with The Co-operative Bank

Overpayments allow customers to build up an overpayment fund, which sits alongside the actual mortgage balance and also allows customers to withdraw these funds at any point in time.

About capital repayments with The Co-operative Bank

A capital repayment is a permanent reduction in the capital outstanding. Capital repayments differ from overpayments in that they cannot be automatically paid back to the customer if requested

The Co-operative Bank offers a wide range of mortgages.
For more information about The Co-operative Bank Mortgages please visit
www.co-operativebank.co.uk/mortgages.

About The Co-operative Financial Services

The Co-operative Financial Services (CFS) is part of The Co-operative Group, which is the world’s largest consumer co-operative with around five million members, over £14 billion turnover, and core business interests in financial services, food, travel, pharmacy and funeral care. The Co-operative Group has over 5,000 retail trading outlets.

Following the merger with Britannia Building Society on 1 August 2009, the new organisation is one of the largest and well-diversified mutual businesses operating in both retail and corporate markets.

As part of The Co-operative Group, the new business will be characterised by its unique ethical and member reward policies and very high levels of customer advocacy.

The combined business has £70 billion in assets, 12,000 staff and nine million customers. It has over 300 high street branches, 20 corporate banking centres and a major presence in Manchester, London, Leek, Bristol, Plymouth, Skelmersdale and Stockport. There are also 1,000 face-to-face financial advisers throughout the UK.

It is the only mutual organisation that enables its members to earn financial rewards for the products they hold, as well as giving them the opportunity to have a say in how the business is ran.