The attitude from many seems to be: “Serves them right. They were living in the never-never.”
During the next nine years 1.3m interest-only loans, worth £111bn, will come to the end of their term – and a substantial number of these borrowers will have no way to repay the outstanding capital.
Today the Financial Conduct Authority will publish its report in to interest-only loans. While the figures contained in this document are likely to be stark, I get the feeling it will take a very cautious tone. There is likely to be lots of talk about regulators and lenders working together to help those left with loans they cannot pay off.
And so they should. No one wants to kick a pensioner out of his home, and a little bit of leniency and help will go a long way.
Certainly some borrowers were living in dreamland. Many were banking on inheritance or a gift from a loved one, both of which failed to materialise.
Others planned to move to repayment deals. For them life got in the way; perhaps they planned to switch after three or four years, but then got married and along came kids, then they needed a bigger house.
In reality only 6 per cent ever move to repayment. It is easy to point a finger of blame.
But time and again, these borrowers remortgaged and on each occasion no broker or lender warned them that they were heading for disaster.
The interest-only crisis is the crippling legacy of Gordon Brown. He oversaw the credit binge that led to millions being approved loans they should simply never have been given. More than 50 per cent of mortgages handed out in 2007 and 2008 were granted without a lender asking for proof of income.
Up to 45 per cent of those who have borrowed in the past eight years are effectively prisoners in their own homes.
Even on historically low interest rates one in five borrowers is struggling.
A senior person at the FSA once asked me what I thought about the prospect of claims handlers chasing interest-only mortgage mis-selling cases.
I told them I thought it was unlikely, and that it was something that was simply being drummed up for a bit of extra business.
