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;
- setting out options for the borrower.
- firms must put in place a written strategy for dealing with interest-only loans they know of that might not have a strategy in place for being paid off at the end of the loan period.
- firms must make staff aware of this strategy and train them accordingly.
- firms must have a strategy for communicating their strategy with their clients.
- firms must assess affordability of new loans or extended loans when they are necessary.
- firms should have a plan in place which will result in existing customers having sufficient time to start putting in place alternative arrangements where necessary at the end of the interest-only loan.
- firms must monitor and manage the effectiveness of this strategy.
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.
Download our Free First Time Buyers Guide
Recent posts
Buying in the New Year
Today
If buying your first property, or moving home, is on your to-do list this year, the new year can be a great time to take this big step. In this short blog, we look at what you need to consider as you plan and prepare for your home-buying journey.
Best UK Mortgage Rates this Week
11 days ago
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Just because the Bank of England decides to reduce the base rate, this doesn't automatically mean that your mortgage rate will go down.
Autumn Budget 2025: A Summary
26 Nov 2025
Chancellor, Rachel Reeves, has delivered the Autumn 2025 budget. We have summarised the government's plans for tax and spending.
Renters' Rights Act
14 Nov 2025
The Renter’s Rights Bill became law at the end of October, which means it has been signed off by the King, and it is now the Renters’ Rights Act. Despite this becoming law, these changes are likely to start changing within the next six months, with the aim of being fully implemented throughout 2026 and into 2027.
A welcome change in school is coming as financial literacy is due to become compulsory in schools in England.
The Government has announced that as part of the new national curriculum, children in primary and secondary education will be required to learn about budgeting, compound interest, managing money, and mortgages.
The top 10 most beautiful villages in the world
24 Oct 2025
Forbes has published a global ranking of stunning locations and one popular picturesque corner of the UK has nabbed top spot.
Over three years after the Mini-Budget took place, we look at what the mortgage market looks like now, showing the difference in mortgage repayments.
More information
Trusted by
