Almost seven in ten consumers do not know how much interest they will pay a lender over the life of a mortgage according to research commissioned by Mortgage Brain Ireland.
 
The survey involved over 1,000 adults aged 18+ year, comprising people who currently have a mortgage, those who don’t have a mortgage and those likely to take out a mortgage in the next 12 months.
 
When asked to calculate the Loan to Value (LTV) for borrowings of €200,000 on a house worth €250,000, almost half (48%) answered incorrectly.

Of particular note are the low levels of mortgage literacy amongst those who are likely to take out a mortgage in the next 12 months, and amongst the younger age cohorts (18-34s), where the knowledge gap is most evident.
 
According to the survey results, there was also a widespread gap in knowledge across the various groupings with more than half (55%) of the population unable to correctly note the impact on interest paid on a 25 year mortgage versus a 35 year mortgage.
 
Managing Director at Mortgage Brain Ireland, Michael Quinn says, "The research has highlighted the surprisingly low levels of mortgage literacy in Ireland. We must therefore invest greater resources in financial education for consumers so they can make smarter decisions when it comes to managing their mortgages and making the right choices."

Source: www.businessworld.ie