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    You are at:Home Interest-Only Mortgage Lowered Since 2012
    Business, Legal & Financial

    Interest-Only Mortgage Lowered Since 2012

    Cristina DiaconuBy Cristina Diaconu18/05/2018No Comments2 Mins Read0 Views
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    Interest-Only Mortgage Lowered Since 2012
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    The UK Finance figures show that in the past six years the number of interest-only mortgages has almost halved, down 46% since 2012 to 1.7 million outstanding mortgages. The total value of the interest-only mortgage book is £250 billion, down 37% in the same period.

    At the end of 2017, there were 1,293,000 pure interest-only mortgages outstanding, a 14.9% fall over the last year, alongside 429,000 partial mortgages outstanding, a 2.1% rise. The number of interest-only loans at over 75% LTV fell by 13.9% in 2017. Loans at these higher loan-to-value ratios now make up 13% of the total, compared to 16% in 2016 and 36% in 2012.

    “The number of outstanding interest-only loans has halved in the past six years, with a particularly steep decline in higher loan-to-value mortgages,” said Jackie Bennett, director of mortgages at UK Finance. “Many borrowers continue to redeem ahead of schedule or switch to a repayment mortgage. However, there remains plenty more work to do over the coming years to ensure that those remaining borrowers who have so far been reluctant to engage have viable repayment plans in place.”

    A separate analysis by UK Finance reveals that out of the one million interest-only loans due to mature by 2020 that were live at the end of 2012, only around 200,000 remain now. The trade body also suggested that lenders are seeing greater success in making contact with borrowers and the vast majority of borrowers who do engage, have repayment plans in place.

    “We continue to encourage all borrowers with interest-only mortgages to contact their lender as soon as possible, as the sooner they do so the more options will be available,” said Jackie. “UK Finance will also be developing new best practice for lenders in this area, to reflect the changing regulatory landscape and help the industry engage successfully with more borrowers.”

    See also  The Hill Group Delivers Results for Sustainable Growth
    Jackie Bennett
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