Interest-only backlog falls by a quarter
By the end of 2014 there were 1.9 million interest-only mortgages and 460,000 part interest-only mortgages, which represented 300,000 and 160,000 fewer loans than the year before.
The CML said a quarter of the reduction was down to loans maturing and a third to a full redemption of loans not set to mature until 2028.
Paul Smee, CML director general, said: “The continued decline in interest-only mortgages outstanding confirms our perception that many borrowers are firmly on top of this issue, and successfully making plans to manage their loans to ensure they are not faced with a payment shortfall at maturity.
“But as an industry we clearly still have work to do to trigger more borrowers to respond to their lenders’ attempts to understand their intentions and help them plan ahead for the maturity of their loans.”
Of the loans which matured, around 16,000 outstanding loans have not yet been repaid or restructured. The CML commented that while this relatively small number is good news, there is no room for complacency on the issue.