There were 1,023,000 pure interest-only homeowner mortgages outstanding at the end of 2019, 8.9% fewer than in 2018, according to data released by UK Finance.
In addition, there were 318,000 partial interest-only (part and part) homeowner mortgages outstanding at the end of 2019, an 11.7% drop compared to 2018.
The total interest-only mortgage stock (including part and part) has reduced by 58% in number and 47% in value since 2012, when the data was first collected.
The number of interest-only loans at more than 75% loan-to-value (LTV) fell by 26% in 2019.
Loans at these higher LTVs now make up 11% of the total, compared to 13% in 2018 and 36% in 2012.
Additionally, the number of interest-only loans set to mature by 2020 shrank by 72,000 in 2019 to just 54,000, a fall of 57.1%.
Eric Leenders, managing director of personal finance at UK Finance, said: “Mortgage lenders have been actively contacting customers with interest-only mortgages to help them to consider their options ahead of the point where balance of the mortgage falls due.
“This has helped many customers to better manage their money and since 2012, the number of interest-only mortgage holders has gone down by 58%, with the value of these loans almost halved.
“Additionally the number of interest-only loans at a higher loan-to-value has also decreased by a quarter in 2019 alone.
“Like many homeowners at this time, interest-only customers are managing through the hugely uncertain impact of COVID-19 and the industry has a plan to help, so we would recommend that customers contact their lender if they are worried about their finances to discuss the support available to them.”