Majority of Irish homeowners clueless about their mortgages

Survey finds 7 in 10 don't know how much interest they will end up paying...

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Image: REA

The majority of Irish homeowners and those planning to buy do not fully understand how mortgages work.

A new survey of 1,000 adults found that 70% of people do not know how much interest they will end up paying on their home over the course of their mortgage. 

Not only that, the majority are unaware that more interest will be paid if a 35-year mortgage is taken out, rather than a 25-year one.

Those surveyed by Coyne Research, on behalf of Mortgage Brain Ireland, were asked if they would be better off with a rate of 5% but cashback paid by their lender when they draw down on the loan, compared to a 4.75% rate with zero cashback.

While seven out of 10 correctly answered that the latter was preferable, some 44% of people who plan on getting a mortgage within the next year answer incorrectly.

The largest knowledge gap is among those aged between 18-35 planning on getting a mortgage over the next year. 

Mortgage Brain MD Michael Quinn told the Irish Independent that the findings highlighted "surprisingly low levels of mortgage literacy" in Ireland and called for greater education.