Brokers say new curriculum must address what young people get wrong about deposits, credit and home ownership
As the government prepares to introduce mortgage education into schools in England, mortgage brokers have called for a curriculum that tackles the fundamental misconceptions preventing first-time buyers from accessing the property market.
"First-time buyers often overestimate the amount of deposit they need," said Clive Read (pictured top left) of Goldmanread Mortgage Services. "They are not aware that they can buy with a 5% deposit and believe they need at least 10%. There are even options with 97%, 99% and 100% mortgages."
The planned changes in the curriculum, which will see pupils learning how mortgages work alongside lessons on budgeting and personal finance, offer a chance to address knowledge gaps that brokers encounter regularly in their work with young adults.
Credit history, Read said, is another area where misconceptions abound. "Young people are often unaware of the importance of basic factors such as registering on the electoral roll, making sure all commitments are up to date—even mobile bills and utilities," he shared, pointing out that these seemingly minor financial behaviours significantly influence lending decisions.
Perhaps more fundamentally, Read stressed that young people need to understand that the first home does not need to be the forever home. "It's just the first rung on the ladder," he said.
For Read, a comprehensive mortgage curriculum should cover loan-to-value ratios, the importance of credit ratings, and the distinctions between leasehold and freehold properties. Understanding what makes an attractive applicant to a lender is equally important, he said.
Hannah Bashford (pictured top right) of Model Financial Solutions, emphasised the importance of teaching financial literacy among children at an early age. "A new University of Michigan study found that children as young as five already had distinct emotional reactions to spending and saving money, and that these translated into actual, real-life spending behaviours," she said. "It is essential for this education to start in key stage 1 and build on it as children grow older."
However, Bashford, who herself has written a curriculum for financial services that teaches about money, taxes, charity giving and entrepreneurship, believes the rise of social media presents additional challenges. "With the rise of social media, there is a plethora of misinformation," she noted. "We aim to provide a reliable, accurate educational framework so children can access correct information and make informed decisions about their finances."
Though it would be ideal if mortgage brokers delivered such education to schoolchildren, practical challenges would need to be addressed, Read acknowledged. "Mortgage brokers are not teachers, so any input from them would have to be quite strictly controlled and governed," he said.
"There is also the matter of compensation and time. Brokers run their own businesses and taking time away from work to visit schools may not be practical. But as an exercise, it could be worth experimenting with how this could work in practice."
Certainly, the challenge for curriculum developers will be ensuring that young people emerge not merely with a theoretical understanding of how mortgages work, but with the practical knowledge and confidence needed to navigate an increasingly complex financial landscape. For the mortgage profession, the development represents an opportunity to shape the next generation of borrowers—equipping them with the literacy to make sound decisions and, equally, to seek expert guidance when they need it.
Whether brokers themselves play a direct role in delivering this education remains to be determined, but the imperative is clear: the earlier children understand their financial options and limitations, the better positioned they will be to make the right financial decisions later in life.
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