Data showed that despite the decline in high LTV mortgages, there was still a ‘healthy’ range of deals for borrowers wishing to take advantage of interest-only repayments options
With more borrowers expected to be eyeing up interest-only options, Moneyfacts.co.uk has found there are well over 1,000 products available to support these customers.
Data released today showed, despite the decline in high LTV mortgages, there was still a ‘healthy’ range of deals for borrowers wishing to take advantage of interest-only repayments options.
Moneyfacts’ figures show there are currently 1,666 products with an interest-only option, which represented 61% of all deals.
Pure interest-only deals are currently limited to 77 – down from 118 in March, before the crisis took hold. There were also 86 retirement interest-only (RIO) deals available, according to Moneyfacts.
But while there was more choice back in March – with 2,533 products with an interest-only option available – these deals represented less of the market overall.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: An interest-only mortgage could be a viable option for borrowers who have suffered financially as a result of the Coronavirus pandemic.
“Borrowers may well be seeking ways to reduce their monthly expenses, and an interest-only mortgage could do just that.”
She added: Savings rates are at record lows and so if some borrowers have more disposable income, they may wish to pay off their debt rather than to save.
UK Finance announced last month the number of outstanding interest-only mortgages had dropped by 10% at the end of 2019.
But Legal and General Mortgage club revealed it had received a significant increase in broker enquiries about interest-only options between April and May 2020. ‘Interest-only mortgages’ was the third most popular search by advisers in the first week of May.
Springall suggested those customers coming off mortgage payment holidays may consider interest-only options as a way to manage repayments during these difficult times.
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