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More homeowners 'could pay off mortgage early'
Record-low interest rates could help one in ten homeowners pay off their mortgage earlier than expected – within the next ten years - according to a new report.
first direct said almost a quarter of borrowers are on course to reach 'freedom day' – when their mortgage is paid in full – within the next decade and this could rise to 35 per cent with smart money management.
According to the lender, the average time between a first house purchase and outright ownership has fallen from 32 years a decade ago, to 30 years in the current economic climate.
Jimmy Kelly, first direct spokesman, said the aspiration to reach freedom day has never been stronger.
"For many, a mortgage represents the biggest debt they will ever have - the typical householder will have five mortgages over their lifetime, which is a massive commitment," he said.
"By making sound financial decisions and choosing a flexible mortgage such as an offset, freedom can be closer than ever before."
The Bank of England has reduced interest rates from five per cent to 0.5 per cent in a series of cuts since last October.