Interest-only mortgages declining but may see a resurgence
3rd July 2023
The era of more prudent mortgage lending since the Global Financial Crisis means that interest-only mortgages have become a much smaller proportion of new mortgage lending.
In 2007 over 40% of new mortgage lending was on an interest-only basis. On the latest data, interest-only is below 8%.
This means that in times of stretched budgets there is an extra lever to pull. Mortgage lenders are being encouraged to be flexible and consider adjustments to the existing mortgage terms.
Temporarily switching to an interest-only mortgage would save £289 pcm, based on the average UK first-time buyer price of £218,000, a Loan-to-Value of 85%, 25-year term and a 5.5% mortgage rate.
The savings will be more in more expensive markets. The saving on the average London first-time buyer price (£435,000) with the same mortgage terms would be £576 a month. Source: #Dataloft, FCA. Data to end of Q1 2023. Disclaimer: The above is for information only. Independent regulated financial advice should always be sought when considering mortgage matters.
How long do we stay in our homes?
27th November 2023
People move more often than they expect to, one of the findings revealed in the recently-released Property Academy Home Moving…
Can rents go up indefinitely?
23rd November 2023
Affordability limits have hit critical points in various UK regions, signaling a diverse landscape in the rental market. While Scotland…
Brighton and Hove City Council’s proposed property licensing changes – webinar
23rd November 2023
Join our exclusive webinar 29th November to explore Brighton and Hove City Council’s proposed property licensing changes. Discover city-wide Additional…
