MortgagesMay 2 2013

Four main areas of interest-only thematic review

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search sponsored by
BySimoney Girard

As part of its thematic review the FCA has released a 50-page report, Residential Interest-Only Mortgages, which it commissioned from Experian.

It looked at four aspects of the thematic review: analysing the size of the problem, customers’ ability to repay, a review of lenders’ current strategies and a review of the application of the FCA’s rules and principles in respect of post-maturity interest-only mortgages.

Among its key findings were that only 5.9 per cent of properties with residential interest-only mortgages were currently in negative equity.

As of December 2011, there were 2.6m residential interest-only mortgages, representing 29.4 per cent of all residential mortgages by case volume.

According to the report, the availability of residential interest-only mortgages has dropped in the past two years by 2.4 per cent.

The majority of residential interest-only mortgages properties were located in London, the southeast and the southwest, particularly among young professionals in their 20s and 30s.