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Home loan interest takes 12 years to pay

7 June 2005

It takes almost 12 years to pay-off the interest on a mortgage a new study has shown.

first direct found that if the cost of the interest on a mortgage was paid off in full up front it would take 11 years, 9 months and 5 days before they could begin paying back the capital on loan.

But by switching to an offset mortgage this 'Mortgage Mercy Day' could be brought forward.

first direct's chief executive Richard Kimber said: "Mortgage Mercy Day helps to illustrate just how much interest borrowers pay their lenders and how an offset mortgage can go a long way towards reducing monthly payments or helping to pay the mortgage off years earlier.

"The arrival of your Mortgage Mercy Day - when you begin to pay for your home, not your loan - is a good psychological boost," he added.