Loans & Mortgages
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Loans and Mortgages
Blackburn - Home of the UK's Fastest Mortgage,
May 15 2006 -- -
Blackburn Residents are Closer to Paying Off Their Mortgages Than Anyone Else in the UK - RBS Offset Mortgage research identifies Blackburn, in Lancashire, as the UK town where the average homeowner is closest to paying off their mortgage completely
The RBS Fastest Mortgage League highlights the UK's mortgage payment hotspots, where average-earning homeowners can pay off the remainder of their mortgages the soonest
Areas of Scotland and the north of England are revealed as the best in the UK for obtaining outright home ownership most quickly
Research identifies distinct differences in potential remaining repayment term between rival UK towns, such as Glasgow and Edinburgh, where a mere one hour drive equates to nearly a eight year difference
The trend towards outright ownership appears indelibly linked to a desire for security: 2 in 5 mortgagees say paying off their mortgage would be the single-most important thing they could do to safeguard their long-term sense of security
RBS Offset Mortgage can help customers to pay off their mortgage early by using the balance of their savings and current account to reduce the interest paid on their mortgage Homeowners who yearn to be free of the mortgage millstone quickly, might wish that they live in Blackburn according to a new study released by RBS Offset Mortgage today.
The study reveals that Blackburn residents are closer to paying off their mortgages than anyone else in the UK. The RBS Fastest Mortgage League outlines the UK's mortgage repayment hotspots, where the average homeowner is closest to completing the final payment on their property. Blackburn tops the table, as the average local homeowner wage of GBP18,356 and property price of GBP89,982, means that the average resident has just eight years and two months of repayment remaining.
Blackburn is closely followed by Halifax, West Yorkshire, where the average resident will take just two months longer to pay off their mortgages completely. Kilmarnock, in Scotland, is third in the League with an average remaining repayment term of just eight years and ten months.
The RBS Fastest Mortgage League has been compiled using the average price of properties combined with the average homeowner income in each area.
Those figures are then used to determine the number of mortgage repayments necessary to pay off the mortgage on an average property, based on the fact that the average UK homeowner spends around 18.5 per cent of their income on mortgage repayment(1).
The result enables the League to identify the top two towns in each region of the UK where residents could be free of mortgage repayments the soonest(2).
The Premier League of Mortgage Repayment
The top towns in each UK region where average earners can pay off their mortgages in the least amount of time.
1. Blackburn 8 years, 12 Wolverhampton 13 years, 2 months 6 months
2. Halifax 8 years, 13 Derby 14 years, 4 months 11 months
3. Kilmarnock 8 years, 14 Nottingham 15 years, 10 months 4 months
4 Falkirk 9 years, 15 Milton Keynes 16 years, 4 months 5 months
5 Teesside 9 years, 16 Uxbridge 16 years, 4 months 9 months
6 Kingston upon Hull 9 years, 17 Peterborough 17 years, 5 months 2 months
7 Manchester 9 years, 18 East Central 17 years, 7 months London 9 months
8 Sunderland 10 years, 19 Exeter 18 years, 11 months 6 months
9 Newport 12 years, 20 Bristol 18 years, 2 months 10 months
10 Stoke-on-Trent 12 years, 21 Medway Towns 18 years, 3 months 11 months
11 Cardiff 13 years, 22 Reading 19 years, 5 months 11 months
The national picture reveals a heavy bias towards the north of England where property prices are significantly lower than the South, while earnings remain comparatively high. However, the picture is more complex than a simple North/South divide, as The RBS Fastest Mortgage League reveals notable differences in the number of remaining repayment years between neighbouring towns.
For example, while residents in Blackburn can potentially pay off their mortgages in less than nine years time, people living just a few miles away in Preston will wait nearly twice as long (almost 18 years).
Regional Rivalries Contrary to their football scores, Newcastle is not on top when it comes to mortgage repayments compared to rival Sunderland. Residents in Newcastle will take an average of 14 years, whereas those residing in Sunderland will take an average of only ten years and 11 months to become mortgage free. Despite being separated by one hour's drive, Glasgow (10 years, 3 months) and Edinburgh (18 years, 1 month) differ by nearly eight years in potential repayment terms.
One of the widest regional differences lies between Wolverhampton and Worcester, where a mere 60 kilometres equates to more than a 10 year difference in remaining mortgage repayment.
My Home is My Castle
Research among a sample of Britain's ten million mortgage holders reveals a strong desire to own one's home outright. Almost 9 in 10 mortgage holders (88 per cent) say they want to pay off their mortgage as soon as possible. Among 18-34 year old mortgagees, almost one quarter (22 per cent) believe they will be able to pay off their mortgage by the time they're 40. Karen Snodgrass, Head of RBS Offset Mortgage, comments: "Our research shows a strong desire among homeowners to make their homes truly their own and pay off their mortgages as soon as possible. Our Fastest Mortgage League highlights areas across the UK where anyone aiming to pay off their mortgage quickly, can make this dream a reality. "Even if consumers do not live in these areas, there is much they can do to become mortgage free quickly. An RBS Offset Mortgage allows you to offset the interest you pay on your mortgage against your current and savings accounts. It can help the average homeowner pay off their mortgage around two and a half years ahead of schedule(3). This flexible approach can also save customers thousands of pounds so that they can become fully financially secure even more quickly." RBS Offset's research suggests that this trend towards outright ownership is being fuelled by an inherent craving for security.
Some 44 per cent of mortgage holders describe paying off their mortgage as the single-biggest thing they could do to safeguard their security in later life - that's almost twice as important to them as building up a pension or a savings nest egg. Almost three-quarters of outright homeowners (72 per cent) agree that paying off their mortgage was the single-most important thing they've ever done to ensure their sense of contentment and security. The study confirms the knock-on effect of this, with statistics showing that, while almost a third of outright owners (31 per cent) feel extremely financially secure, less than 1 in 6 of current mortgagees (14 per cent) feel this way. For more information on the RBS Offset Mortgage, or to apply, customers should visit their local branch or, alternatively, visit www.rbs.co.uk/
Research by The Royal Bank of Scotland conducted by Experian among 854 GB mortgage holders.
The average outstanding loan on mortgaged properties within each town is assumed to be 35% LTV. This figure is derived by taking the average initial LTV of 70% and assuming that half of the population has repaid half their mortgage (70% divided by two equals 35%). For example in Blackburn we assume that an owner of a GBP100,000 property will have an outstanding mortgage of GBP35,000. Different LTV assumptions will not affect the order of the rankings, but simply increase or decrease repayment time. 3 The chances are that most people are paying a higher rate of interest on their mortgage than they are earning on the money in their current account and savings account.
The Royal Bank's Offset Service aims to turn this to their advantage, whilst keeping their accounts completely separate. Rather than earning interest on the money in their current account and up to three savings accounts, customers do not pay interest on the equivalent amount of mortgage. As their monthly mortgage payments stay the same, the interest saved each month goes to repay their mortgage early.
With a GBP113,000 mortgage, an average current account balance of GBP1,500 and GBP6,500 savings, a customer would not pay interest on GBP8,000 worth of mortgage. Over 25 years, they would save GBP20,091 in mortgage interest and pay off the mortgage 2 years and 5 months early. Customers can calculate their potential savings based on their personal circumstances by using the Offset Mortgage calculator
