Is There Any Such Thing as an 'Average' Home Owner Loan?

Adam Brand Adam Brand | Operations Director

The financial services industry is one prone to generalities. For example, it is easy to say that the average UK homeowner takes on a mortgage worth so much money. We can say that the average saver puts away so much money per year. But those averages are rarely accurate in real terms. So when someone asks, 'is there any such thing as a home owner loan', the honest answer is 'no'.

An 11th April (2017) article appearing in the Sun offered a profile of the average UK homeowner from the moment he leaves his parents' home to the day he dies. Apparently, the average homeowner moves out at 21, lives in seven different houses, and spends nearly £26,300 on home renovations.

These 'average' numbers might tempt one to say that the £26,300 in home renovations equates to an average home owner loan. But that is not necessarily true. Some of those remodelling projects might be paid for with credit cards or cash. Property owners can use savings or money from pensions as well. Just because a homeowner does renovations doesn't mean they will be paid for with a home loan.

Home Owner Loans Are Personal

We constantly tell our readers to shop around for home owner loans. Why? For a couple of reasons. First, lenders are known to offer different kinds of deals that are all over the place. They do so to leverage their ability to compete in a crowded marketplace. Second, the individual borrower's circumstances play heavily into what kind of deal he or she can get. To put it simply, home owner loans are very personal.

You might be a property owner with stellar credit, £50,000 in equity, and a home located in a very lucrative neighbourhood. Your circumstances would indicate a very good deal on a home owner loan. But you may have a co-worker who lives in a less desirable neighbourhood with substantially less equity. He may not get such a sweet deal even though his credit rating is equal to yours.

The take-away is that getting a home owner loan is a matter of leveraging your own assets to guarantee the best possible deal on the largest amount. It is as simple as that. But there is nothing average about it. The best we can say in any attempt to come up with an average home owner loan is to settle on a monetary value. We could not create an average profile that accounts for all the different circumstances and still be generally accurate.

Home Owner Loans for Renovations

Before closing out this post, we want to address those renovations previously mentioned. It's fascinating to learn that the average UK homeowner spends so much money on renovations over the course of a lifetime. We would be equally interested to know if that £26,300 amount is spread across all seven houses or confined to just one. That makes a difference when talking about how renovations are paid for.

A single renovation project worth tens of thousands of pounds would likely be financed through a secured loan taken against the property in question. But ten renovation projects at £2,600 apiece may be paid for using cash or credit cards. It is just something to think about.

Despite our best efforts, there really is no such thing as an average home owner loan. Lenders offer loan deals based on an extensive list of criteria that varies from one borrower to the next. If you are planning to borrow, heed our previous advice of shopping around and comparing offers.


The Sun ??

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