Why do mortgage holders save?
Online bank, First Direct, has just released research indicating that homeowners are more likely to save spare cash rather than using it to pay down their mortgage more quickly.
According to the bank, a survey of 1022 UK mortgage holders revealed that 42% are regularly saving with only half that number regularly overpaying on their mortgage. This is despite the fact that the economic downturn has badly affected interest rates. It may have something to do with the fact that a third of those surveyed didn’t know what interest rate they were paying on their mortgage and a quarter didn’t know whether they were allowed to overpay their mortgage. Ironically, when savers were asked what purpose they might use their savings to for, almost half said to pay off their mortgage.