Approximately 2.6 million interest-only mortgages will become due for repayment within the next decade and while nine out of ten people will have a clear plan in place to repay their mortgage, it’s thought that 10 percent do not. That’s about 260,000 people!
The Financial Conduct Authority (FCA) have written a paper on the subject clarifying their stance. Here are their main findings and recommendations;
The FCA has published guidance to help set out what is expected of lenders and brokers when dealing with borrowers that have an interest-only mortgage. These measures include;
The FCA will be monitoring progress closely and providing guidance and assistance to firms where it is needed.
In addition to advice on existing interest-only mortgages, there is also the growing market of Lifetime Mortgages which are also, in large part, interest-only. The Financial Times have written on the subject and we have our own views here.
For more information or to speak to a Maidenhead Mortgage expert, contact us on 01628 507477.
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