Young People Are Paying A Lot More On Their Mortgages
Comparison website Uswitch have released figures this week from a recent study, that show young people are shockingly paying a disproportionate amount more per month on their mortgages that older people. According to Uswitch, people between the age of 18 and 24 years old are paying on average £1,390.90 a month in mortgage repayments, that’s 45.6% more than 25 to 34-year-olds’ who pay on average £874.35 per month.
People aged 55 and over on average pay the lowest per month at £763.69, a mind boggling 59% lower than the younger generation. Of course, there is the argument that some people aged over 55 will have smaller mortgages and are potentially retired so may have a lower projected income that people just starting their careers however, surely the younger people should be given more of an incentive to enter the property market?
Uswitch suggests that a possible cause of these higher mortgage payments for young people could be the lack of deposit that they have. As saving money becomes more tricky and lenders are asking for larger deposits to bridge property affordability, young people are feeling pressured into taking mortgage products with higher interest rates compared to older people who often have more equity in their property or more savings.
What Else Does The Data Show?
Some other points that Uswitch’s research brought up are as follows:
- 0.99% of 18 to 24-year-olds have monthly repayments exceeding £3,000.
- On average, 0.48% of 45 to 54-year-olds repay over £3,000 a month for their mortgage: the second largest portion from all ages analysed.
- 25 to 34-year-olds have the longest mortgage terms on average at almost 30 years (29.44). On average, 57.25% of homeowners in this age bracket have a mortgage term of 30 years or longer.
- The average length of a 25 to 34-year-old’s mortgage is 30% longer than the initial mortgage term for those aged 55 and over (22.73 years).
- While those aged 18 to 24 have a shorter period of 26.09 years, Uswitch says this will more than likely increase due to the recent introduction of 50-year mortgages in the UK.
- Although fixed-rate mortgages are the most popular across all age brackets, they are utilised far less by 18 to 24-year-olds.
- At least half of every other age bracket has a fixed-rate mortgage, but only 41.58% of 18 to 24-year-olds opted for this deal.
- When it comes to those aged 25 to 34, fixed-rate mortgages make up around 80% of them.
How A Mortgage Advisor Can Help
As mortgage advisors, we at Oportfolio have seen first hand the affect of people (especially young people) who are on the wrong mortgage product with the wrong lender. If you or anyone you know is worried about mortgage payments, feel free to give our advisor team a call today. We have access to over 90 different mortgage lenders and hundreds of mortgage products. Our job is to find you the best deal available, so give us a call to see what we can do.