Over 60 and still paying off the mortgage
New Equifax research reveals that nearly 40% of homeowners will be older than they had originally planned by the time they pay off their mortgage
New YouGov research* commissioned by online credit information provider, Equifax, has revealed the latest outlook of current homeowners who have a mortgage, with over a third (36%) expecting to be older than they had originally planned by the time they pay off their mortgage. And nearly a third (32%) would be prepared to cut back on general living expenses for at least six months, including food and energy bills, to be able to afford the mortgage for their next home.
According to the Equifax research, over a third (36%) of homeowners now expect to be older than they had expected before they are able to pay off their mortgage, with most believing they will be between 61-65 years old (23%). Nearly a quarter of homeowners in the North (23%), South (25%) and Midlands (23%) say they will be in that age bracket, but the highest percentage comes from Scotland with over 1 in 3 homeowners (34%) saying they believe they will be between 61-65 years old before they are mortgage free. One in ten (11%) expect to be between 66 and 70 before completing mortgage payments.
Homeowners in the North (42%) are the least optimistic about the age by which they will own their home outright. Londoners were the most optimistic with only 27% thinking they will be older than expected before they pay off their mortgage.
Interestingly, homeowners between the ages of 35-44 expect to pay off their mortgage at an earlier age that those older than them. Over a quarter (26%) expect to be mortgage free between the ages of 56-60, whereas most of those aged between 45-54 expect to be between the ages of 61 to 65 before they can pay off their mortgage (30%.)
The latest research also provides a snapshot of the sacrifices people will make in order to secure their ‘dream’ home as the impact of new mortgage affordability rules sinks in.
Although recent focus has been on first time buyers, those looking to buy their second or third home will also face strict affordability tests before they can move on. Among those second and third time home movers, a quarter (26%) would be willing to take on the stress of a new job with a higher wage to secure the finance for their dream home. And almost a quarter (23%) said they would borrow the maximum amount available to them.
Being able to manage the additional financial pressure, one in three (31%) homeowners surveyed by YouGov said they would be prepared to cut back on general living expenses for at least 6 months, and 49% were willing to tighten the purse strings over luxury living expenses to buy a home. Over half (56%) would reduce the amount of time spent with friends and socialising, and just over half (53%) would also cut back on retail therapy for at least six months to be able to afford a new mortgage.
“With new housing stock limited, it is vital for homeowners to continue to move up the property ladder in order to free up smaller homes for first time buyers”, explained Andrew Webb, Sales & Marketing Director of Equifax Personal Solutions.
“But they must be in a strong financial position to do so. The fact that, according to the research we commissioned, many homeowners recognise the importance of cutting back on their lifestyle spending, including holidays and socialising, is promising in terms of managing their future affordability. It’s also important because of the new mortgage affordability rules. Home buyers need to remember that their current financial behaviour will determine the likelihood of them being able to borrow the amount needed for their next home.
“We suggest anyone planning on making a home move in the next 6 to 12 months keeps track of their current financial commitments and regularly checks their credit report. When applying for a mortgage, credit information will be used to confirm their identity and assess their credit status. It’s important, therefore, that they understand what information is on their credit report.”
The Equifax Credit Report is accessible for 30 days free simply by logging onto www.equifax.co.uk/Products/credit/credit-report.html. If customers do not cancel before the end of the 30 Day Free Trial, the service will continue at £9.95 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,733 adults of which 1,524 adults own their home on a mortgage. Fieldwork was undertaken between 8th – 12th May 2014. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
For further press information, please contact: Clare Watson, Cecile Stearn, Parm Heer or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or email: firstname.lastname@example.org
Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company’s significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.