The stock of exceptional interest-only owner occupier home loans fell every year at the end of 2022, figures from UK Finance program.
At completion of in 2015, there were 702,000 pure interest-only home loans, a drop of 6.9 percent on 2021. The variety of partial interest-only home loans pertained to 222,000, 11.9 percent less than 2021.
In overall, the interest-only home loan stock, consisting of part-and-part home loans, has actually fallen by 71 percent in number given that 2012 and contracted 56 percent in worth. The worth of interest-only home loans now stands at £176bn, consisting of £134bn of pure interest-only home loans and £42bn of partial deals.
A significant decrease in interest-only home loans at greater loan to worth (LTV) tiers of 75 percent LTV or greater was seen in 2022, when the number stopped by a 3rd to 34,000.
The share of interest-only deals at LTVs in between 50 and 75 percent likewise contracted by a 3rd to 128,000.
Interest-just home loans at high LTVs now represent 5 percent of the general stock, compared to 7 percent in 2021 and 36 percent in 2012.
The variety of interest-only home loans which are anticipated to grow by 2027 likewise fell by 73,000 in 2015 to 261,000. This represented a 21.9 percent decrease and totals up to a worth of £37bn.
An overall of 637,000 home loans worth £135bn which are anticipated to grow in 2028 and beyond.
Some 27,000 interest-only home loans had actually ended since completion of 2022, at a worth of £4bn.
Borrowers still paying for loans
Charles Roe, director of home loans at UK Finance, said: “Even as cost-of-living and rate pressures constructed through 2022, interest-only home loan consumers continued to repay their loans, lots of well ahead of the scheduled maturity date.
“In total the interest-only stock, which numbered over three million mortgages 10 years ago, is now a little over one quarter of that size. Lenders continue to refine their targeted programmes to reach out to their interest-only customers, yielding positive results in ensuring borrowers are on track to repay.”
He included: “The little number of debtors who do not pay back right away upon maturity stays extremely low, and information suggest the huge bulk of these perform in reality pay back completely over the very first couple of months following completion of term.
“As always, any customers worried about repaying their mortgage should contact their lenders early, who stand ready to help with a range of options to repay.”
Shekina is the business editor at Mortgage Solutions. She has more than 4 years’ experience in the B2B publishing market, with previous markets consisting of the accounting, family pet, funeral service, hospitality, retail and jewellery trades.
She presently reports on present occasions in the home loan market and communicates with monetary customers to produce sponsored material.
Follow her on Twitter at @ShekinaMS
