The Financial Conduct Authority has published its research into consumers’ ability to repay their interest-only mortgages when they mature.
The findings show that many people should be in a good position to repay their mortgage when it is due for repayment.
However many borrowers, particularly those whose mortgage is due to be repaid before 2020, will need to take control of their mortgage repayment planning now. To that end the FCA, the Council of Mortgage Lenders and the Building Societies Association are working together to ensure lenders contact their borrowers in order to prompt them into checking their plan for repayment is on track and considering the options available to them.
This type of pre-emptive work is indicative of the way the FCA will act in the future, endeavouring to spot potential problem areas and prevent them from developing into bigger issues. By acting now, together with the mortgage sector, the FCA is aiming to prevent interest only borrowers defaulting on their loans in the future.
The FCA believes that with careful planning, consideration and engagement with their lender, many interest only borrowers – even those with loans maturing by 2020 – should be able to find a viable way to pay off their mortgage if they take control now.
Because these people have the least amount of time to find a solution, lenders will be contacting them first, if they have not already.
For independent whole of market mortgage advice contact Integrity IFA. Independent mortgage advice in Edinburgh and the Lothians.