A recent survey conducted by Compare the Market has revealed that more than 71% of people in the UK believe the mortgage process should be taught in schools. This finding underscores the widespread confusion surrounding mortgages, as evidenced by the fact that the phrase “what is a mortgage?” receives an average of 4,400 Google searches per month.
The survey explored the public’s understanding of mortgage-related terms and found that “LPA” (lasting power of attorney) is the most confusing term, with only 7% of respondents knowing its meaning. In contrast, “fixed-rate mortgage” was the most understood term, recognized by 52% of respondents. Other commonly misunderstood terms include “SVR” (standard variable rate mortgage), understood by just 12%, and “capital on mortgage,” known by 20% of those surveyed.
Interestingly, 16% of people who currently have a mortgage admit they still do not fully understand it. This lack of understanding is less prevalent among those who own their homes outright (7%) and renters (12%).
The survey also identified Norwich as the city with the lowest confidence in mortgage knowledge, with 23% of residents who have a mortgage admitting they don’t fully understand it. This was followed by Newcastle at 21% and London at 19%.
The call for mortgage education in schools was strong across all age groups, with 71% overall in favor. Among those in the Gen-Z age group (16-26), 62% agreed that the mortgage process should be taught in schools, while 76% of the silent generation (aged 78+) supported the idea. This suggests a growing consensus that financial literacy, particularly regarding mortgages, should be a fundamental part of education in the UK.