Customers are using flexible mortgages to change their futures, research from Standard Life Bank reveals.
Standard Life Bank's Freestyle Finance Report shows that customers are increasingly using their freestyle cash reserve to realise long-held ambitions including starting businesses, paying for a child's education or investing for the future.
David Macmillan, sales and marketing director at Standard Life Bank, describes the new wave of borrowing as a culture shift. He says: “Consumers are turning the accepted myth that a mortgage is a 25-year old millstone on its head and realising that it is probably their best asset and most powerful tool to change your life.
“There is a new generation of individuals who have realised this since the introduction of flexible mortgages. They are using cash draw down facilities to borrow money at cheap rates to undertake life-changing projects. Flexible mortgages have become a catalyst for real change.”
Standard Life Bank customers are being increasingly inventive about how to use their mortgage. One bought a narrow boat, a second a steam engine and a third a vintage car, all as investments. Others have chosen to give their children a head start through paying for education - one mother contributing towards the cost of a son's MBA degree.
At the same time, Standard Life Bank says many customers are alive to the investment opportunities offered by the low rates of interest that they can secure on borrowing. More than half of those questioned were using the money to increase the value of their house by adding on conservatories, fitting new kitchens or bathrooms, replacing windows and making improvements to gardens, while 8% used the money to buy a second property either at home or abroad.