People with poor maths skills are more likely to get behind in meeting mortgage repayments – often to the point of repossession.
Scientists from the University of Lausanne in Switzerland found that those who displayed a fundamental lack of skills when it came to dealing with statistics, percentages and other mathematical equations struggled to deal with bills – including mortgages.
Some 339 subprime borrowers in the US who took out loans between 2006 and 2007 were asked a number of questions over the telephone to assess their abilities, according to the Daily Telegraph.
Professor Lorenz Goette, the study’s author said the results show that building societies and banks should offer more guidance to those who struggle with maths so they are more able to keep up with repayments.
“If financial education can reduce sub-optimal financial decision making, this could have profound effects on household behaviour, as suggested by our results,” the expert added.
Mortgage lenders in the US were accused of offering mortgages with high interest rates to those who did not understand what they were signing up for in the period leading up to the 2008 financial crisis.