The time to review is right NOW for Interest Only Mortgage holders
It is believed that there are round 200,000 people with interest-only mortgages that are due to mature between now and 2020. Therefore, if you are one of them you are certainly not alone but need to act in a proactive way now.
The number of borrowers on interest only mortgages have fallen over the past six years, according to FCA records. However, the matter remains a concern for so many and needs to be resolved.
Therefore, significant numbers of borrowers coming to the end of their interest-only mortgage over the next year or so and are now being contacted by their lenders as to what they plan to do about dealing with the matter – which remains a challenge for lenders according to UK Finance research. Lenders are seeing a greater success through engaging with borrowers and as a result can put in place and provide repayment plans that can suit individual needs.
The stats for interest only mortgages
There are overall 1.7m outstanding interest-only mortgages, including partial interest-only, which is a fall of 46% since 2012.The total value of the interest-only mortgage book now stands at £250bn, down 37% over the same period. (Source: FCA & UK Finance)
Lenders and financial advisers are encouraging all borrowers with interest-only mortgages to contact them as soon as possible. The sooner they do so the more options will likely be available and a better opportunity to find an agreeable solution with some peace of mind.
Several major lenders are being proactive in redesigning mortgage terms such as extending to ages of 90 years and beyond in some cases to open the opportunity to more consumers and help resolve matters.
These are NOT equity release products although in some cases this may be considered carefully and with proper advice. There are therefore possibly better suited products to suit the longer term planning of many individuals in this situation.
These products are in many cases only available through professionally qualified intermediaries and therefore it is appropriate to make contact and see how to potentially resolve the interest only mortgage situation you may find yourself in at the moment.
The general advice today is not to delay something that is indeed potentially resolvable with a little help from those in the know – it simply makes sense.