Most repaying over their mortgage’s minimum
A majority of mortgage holders are currently making additional repayments to their loans, helped by low interest rates, according to a recent survey.
Seventy-seven per cent of homeowners were found to be making additional repayments, with the most common activity to make the payments and then redraw when necessary, a Mortgage Choice-driven study has found.
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Another good financial habit was to round up repayments to the nearest hundred.
The results, from the 2013 Homeowner Intentions Survey conducted by Mortgage Choice, found that repaying a mortgage was their respondents’ most common pressing financial concern. Cost of living and credit card debt came in at second and third place respectively.
However, with nearly 85 per cent of homeowners citing that they are either in a ‘solid’ (23 per cent) or ‘reasonable’ (61 per cent) situation, it’s clear that for many property has been a solid financial decision.
Head of corporate affairs at Mortgage Choice Belinda Williamson said, “The fact that over one third of homeowners may see their mortgage repayments at the top of their financial priority list is a really encouraging sign".
Ms Williamson said, “If your investment strategy or overall goal is to repay your home loan, then making extra payments is a great habit to get into. It will help you to repay the home loan sooner and build up a buffer to cope with future interest rate rises or changes to your financial situation.
“It was interesting to see that of those people who were making additional mortgage repayments, over 50 per cent said they had not made any lifestyle sacrifices to do so. When asked whether they would continue to make additional repayments if interest rates go up, nearly 45 per cent said they would as they had already factored in higher repayments.”