Arranging masses of Interest only mortgages seems like a dim and distant memory, but 25 years on from the endowment boom there are still around 4 million of them around.
In some cases, the endowments have long since been cashed in to pay for a holiday / car / outstanding debt, but no attempt has been made to repay any of the capital.
Lenders have for a long time been trying to tempt / coax / shove clients away from interest only and on to a repayment mortgage, but different lenders have very different ways of dealing with those clients who cannot or will not change.
For example, one lender who has hit my radar charges 5% to interest only borrowers whilst offering nearer 2% to others. It would appear that some lenders are applying the same rules to everyone regardless if they have a suitable repayment strategy to pay off their loans or not.
Unfortunately, most interest only mortgage holders are over 50 and their mortgage options are more limited, for example only recently some of the smaller building societies have reduced their mortgage cut off ages from 75 to 70.
When borrowers come to the end of their fixed rate period, lenders tend to use this as an opportunity to apply their new interest only rules. We have had a steady stream of calls from worried borrowers who have seen their payments increase overnight by anything up to £350 a month.
I would advise anyone who is worried about being on interest only to speak to their existing lender to see if they can come to an arrangement to start repaying their capital. If your lender cannot come to a manageable arrangement, then speak to an Independent Mortgage Adviser who will be able to look at the whole market to see if another lender has a more manageable solution.
For more information or to speak to a mortgage adviser please contact us on 01628 507477.
Recent posts
Delayed Start Mortgages
2 days ago
The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers.
Green Mortgages | Rewards and Benefits
4 days ago
Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
14 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
Lloyds boost lending for first-time buyers
21 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
Nationwide ease criteria for first-time buyers
24 days ago
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
More information
Trusted by
