May saw significant rise in interest-only criteria searches

Jessica Bird

June 12, 2020

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The period between April and May 2020 saw a significant increase in advisers searching for criteria around interest-only mortgages, according to data released by Legal & General Mortgage Club.

The criteria search combination for interest-only, maximum age for interest-only and minimum income was the third most searched for topic on the company’s SmartrCriteria tool last month.

Loan-to-value (LTV) and mortgages for people who had defaulted in the past made up the top two searches by advisers.

In April, searches for interest-only were sixth on the list.

The data also shows that weekly searches for interest-only product criteria were already starting to rise before the lockdown eased.

Although there were just a few enquiries for interest-only in the first week of April, searches for these products had moved to be the third highest search by advisers in the first week of May.

Searches for mortgages for customers who had experienced a default in the past had risen sharply a well, more than doubling between April and May 2020.

Adviser searches for options for customers with County Court Judgments (CCJs) or debt management plans had also seen rises over the same period.

Kevin Roberts, director of Legal & General Mortgage Club, said: “Coronavirus has clearly impacted many homeowners’ finances.

“Millions have been furloughed while others face significant disruption to their businesses – as a result, one in seven borrowers has taken the decision to defer their mortgage repayments.

“For many, these payment holidays will be a lifeline, but they are not the only solution for borrowers and in many instances there will be alternative options that are more appropriate for their circumstances.

“This is exactly where mortgage advisers can and are playing a critical role for borrowers, guiding and supporting them to make the best decisions for their needs and plans.

“Our data shows that advisers are already thinking outside the box and searching for new options for borrowers who are on or considering payment holidays, that can help them to manage their monthly mortgage repayments.”

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