26
Mar
'Nothing wrong' with interest-only deals
Interest-only mortgages are "rational" and their popularity may
have risen in tandem with that of the buy-to-let industry, it has
been claimed.
Communications manager at the Council of Mortgage Lenders Bernard
Clarke stated that consumers who take on these deals have to be
aware of the responsibility that comes with them.
The industry should therefore not be too worried about the
development, Mr Clarke said, because borrowers should take action
when they remortgage to solve the problem of repayment.
Figures in the sector have been higher in the past, he added, while
today's statistics have been boosted by the buy-to-let sector, in
which these kind of mortgages are often used.
But borrowers in the present climate also realise in the main that
there are "consequences" that come with interest-only deals and
that they have to be repaid, he remarked.
January this year saw 24.5 per cent of the loans advanced done so
in interest-only terms, mform.co.uk has said.