Interest-only homeowner mortgages fell by 5.4% to 664,000 last year compared to 12 months before, the latest data from UK Finance reveals.
Interest Only mortgages are declining in numbers year on year. This means that borrowers who may have historically taken an interest only mortgage linked to an endowment policy or similar are repaying their interest only mortgages.
The latest figures from UK Finance’s interest-only mortgages data for 2023 shows that partial interest-only home loans fell by 9.9% to 200,000 over the same period.
The total interest-only mortgage stock has been slashed by 73% in number and 56% in value since 2012 when the association started collecting data.
Although the overall interest-only stock continues to fall, the number of interest-only loans at higher loan-to-values went up by 2.9% in 2023.
However, loans at these higher LTVs now make up just 5% of the total, compared with 36% in 2012.
Meanwhile, the number of interest-only loans set to mature by 2027 reduced by 28.4% in 2023 to 187,000 loans.
But what happens if you don’t have a repayment vehicle like an endowment?
Many borrowers are reaching the end of their mortgage term and do not have the means to repay the debt. These borrowers are sometimes known as mortgage prisoners, and this is because they are effectively trapped with a mortgage that they cannot repay because they do not have the capital to do so.
If you are struggling to understand your options to repay your interest only mortgage, you can read my blog post below on your options to consider.
Ready to find out more? Visit our dedicated later life lending page to arrange your free 10 minute discovery call!
Mike Jones
Later Life Lending Specialist
Mike Jones is a later life lending specialist who is responsible for the “Mewstone Later Life Lending” service. Mike has years of experience in retail banking as well as extensive knowledge of the later life lending sector.
Choosing to release money from your home is a big decision and it’s important for you to understand all the options available to you. This means that he will always offer you unbiased advice. It doesn’t matter to us which solution or lender is recommend, as long as it is the right one for you.