Homeowners overpay mortgage with lockdown savings

Homeowners overpay mortgage with lockdown savings
 Credit: Joe Giddens/PA Wire

Homeowners have saved money and paid off extra on their mortgage during the pandemic, according to research by First Mortgage.

A survey of 1,000 first-time buyers between October and November by the broker found more than two in five had overpaid on their mortgage by an average of £370 a month.

Around one in three surveyed said they found it easier to save money during lockdown, such as from being unable to visit pubs and restaurants (52 per cent), travel (47 per cent) or commute to work (35 per cent).

Additionally, 42 per cent of 25-34 year olds said lockdown had enabled them to pay off more of their mortgage than usual, which increased to 54 per cent among 18-24 year olds.

David McGrail, compliance director at First Mortgage, said: “It might be surprising to see that many have been overpaying on their mortgage this year, but when you consider the amount of money saved not commuting and with holidays being disrupted many have put the leftover cash to try pay off their mortgage quicker.”

While 44 per cent said they had been able to pay off more of their mortgage each month since the first lockdown, 45 per cent took a mortgage payment deferral this year.

Figures from UK Finance showed an estimated 162,000 mortgage customers were still on a payment deferral as of October 9, down from a peak of 1.8m in June.

The Financial Conduct Authority proposed to extend the availability of mortgage payment deferrals as England entered a second lockdown last week.

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