Over £50bn interest-only mortgage capital will be paid off by 2020 with £16bn being repaid in 2017, research from Leeds Building Society has shown.
This figure represents just over 450,000 interest-only mortgages in the UK and is just over one third of the total outstanding UK interest-only mortgage stock.
Leeds Building Society conducted the research with the Centre of Economics and Business Research (Cebr) to better understand the existing scale of interest only borrowing in the UK.
Richard Fearon, chief commercial officer of Leeds Building Society, said: “We firmly believe there’s a place for interest-only alongside repayment mortgages.
“It is pleasing to see from our research that many borrowers are addressing their individual repayment strategies and that the interest-only back book is shrinking ahead of schedule.
“This is testament to the hard work of the lenders, regulators and the Council of Mortgage Lenders for raising awareness among borrowers of the need for them to consider how they will repay their loan at the end of the term.”