Interest-only mortgage numbers halve in six years
The number of interest-only mortgages held across the UK has almost halved in the past six years, according to figures from trade body UK Finance.
The association noted there are currently 1.7 million outstanding interest-only mortgages (including partial interest-only), down 46% since 2012, when this data was first collected.
The total value of the interest-only mortgage book is £250 billion, down 37% over the same period.
Crunching the numbers
There were 1,293,000 pure interest-only homeowner mortgages outstanding at the end of 2017, a 14.9% fall over the last year.
There were 429,000 partial interest-only homeowner mortgages outstanding at the end of 2017, a 2.1% rise over the last year.
The number of interest-only loans at higher loan-to-value ratios (over 75% of the property’s value) fell by 13.9% in 2017.
Loans at these higher loan-to-value ratios (LTVs) now make up 13% of the total, compared to 36% in 2012.
UK Finance also revealed that, of the one million interest-only loans due to mature by 2020 that were live at the end of 2012, only around 200,000 now remain.
Jackie Bennett, director of mortgages at UK Finance, said: “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.
“Many borrowers continue to redeem ahead of schedule or switch to a repayment mortgage.
“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.”