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Putting the gag back into mortgages

27 Nov 2015

Two thirds of first-time buyers don’t know what stamp duty is

Half of Brits baffled by terms such as ‘arrangement fee’ and ‘standard variable rate’.
first direct launches comedy video series to demystify mortgage jargon.

While nearly half of Brits (46%) claim they understand home-buying terminology, new research shows that actually two thirds – including the most experienced home-buyers – fail to identify the real meaning of terms such as stamp duty and offset mortgage.

The UK-wide survey carried out by leading online and telephone bank first direct probed more than 2,000 home-buyers on a range of mortgage and home-buying jargon and found that most people lack even a basic understanding of key terms. The research showed that:

  • 66% of first-time buyers don’t know what stamp duty means and one in four (25%) don’t know who pays the stamp duty.
  • 5% of Brits think stamp duty is a sales tax based on the square footage of the property. Stamp duty is in fact a fee charged for the physical stamp that is impressed on documents – like property title deeds - to make them legal. It is paid for by the buyer. 
  • Almost 70% of Brits can’t give the correct meaning of an offset mortgage (a way of linking your savings or current account to your mortgage to help save money on mortgage interest).
  • And finally, 67% of Brits don’t know that ERC means Early Repayment Charge – a fee for paying your mortgage off earlier than originally agreed.

To help demystify the process for first-time buyers as well as more seasoned homeowners, first direct has produced a series of videos that use comedy sketches to help people get to grips with the common phrases and terminology used when buying a house. This follows the recent mortgage fees tariff launched by the Council of Mortgage Lenders and Which? to standardise the way lenders communicate their fees and make it easier for customers to understand charges and compare deals.

Tracie Pearce, Head of Mortgages at first direct , said: “We want to make buying a property as simple as possible for our customers and our videos help to explain the mortgage process in everyday language which we hope will guide, reassure and ease our customers through this process.” 

The videos were penned by the award-winning writers Hoot Comedy who have directed well-known commercials for other big brands like Coca-Cola and Virgin Atlantic. You can watch the first direct hoot videos at http://mortgages.firstdirect.com/.

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