Mortgage advisors indicate refreshed appetite for interest only mortgages

28th August 2019

Mortgage advisors indicate refreshed appetite for interest only mortgages Intermediaries say interest only mortgages comprised 20 per cent of new business introduced in the second quarter of 2019, down from a 2007 peak of 28 percent, but significantly higher than five years ago. Repayment mortgages made up almost all the remaining proportion of new business in that time.

The latest numbers, from Paragon’s long-running, quarterly Financial Adviser Confidence Tracking Index (FACT), suggest interest only mortgages continue to offer an effective solution for a substantial proportion of customers where a credible repayment strategy is in place.

Despite the increase in interest only introductions recorded in the latest FACT survey, regulated providers remain focused on reducing the overall number, value and average Loan to Value (LTV) ratio of the UK’s interest only mortgage stock.

John Heron, Managing Director of Mortgages at Paragon said: "While repayment mortgages are now by far the most popular type of mortgage, interest only continues to have an important part to play in the post-MMR environment.
For customers who can demonstrate appropriate provision for paying back the capital, interest only mortgages provide a useful vehicle for controlling costs whilst allowing customers optionality to invest and build capital elsewhere.
Higher LTV requirements and closer scrutiny of repayment plans however mean interest only is now a much smaller part of the overall market.”

Source: Propertymark
A Happy New Year from all at Stanbra Powell.

We have had many questions regarding our position after the governments announcement to lock the country down for the foreseeable future.

As with the first lockdown in March, the housing market stays fully open for business.

This means that as long as everyone adheres to the regulations in terms of safety then both sales and lettings agents can still offer viewings, property valuations and assist in the sales progression alongside solicitors.

We are however, are currently only offering viewings to proceedable people unless local with a home to sell.

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