The majority of UK mortgage lenders are allowing homeowners to pay unnecessary interest on their ...
The majority of UK mortgage lenders are allowing homeowners to pay unnecessary interest on their home loans, according to research undertaken by Yorkshire Bank.
The research, which was conducted by Taylor Nelson Sofres, says this is totally out of step with homeowners' increasingly complex financial expectations.
The findings of the research demonstrate that in 1998 only 25% of people wanted a mortgage that could combine all their personal finance needs but by 2001 this figure had more than doubled to 52%.
A mortgage that would let them pay more when flush and less when money was tight was desired by 78 percent of people three years ago, but 87 percent now.
Thirty-seven percent of homeowners in 1998 wanted a mortgage that would let them borrow more money whenever they needed, using their house as security. By this year 51% of people would like this opportunity.
An increase has also been noted in the number of mortgage holders who wrongly believe all mortgage payments can only vary if the interest rate goes up or down, not according to changes in personal circumstance.
The move by some lending institutions to implement mortgage plans that offset money owed on a mortgage against money in a current or saving account, was seen as a good idea by 64 percent of people.
A similar number believed mortgages should constantly evolve to keep up with the increasingly complex financial needs of today's homeowners.
Nearly three quarters of the people surveyed though that a modern mortgage should have a facility which lets their savings grow at a high, tax-free rate.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected