There had been 541,000 pure interest-only home-owner mortgages excellent on the finish of 2024, which is eighteen.5% fewer than in 2023, UK Finance reveals.
Data additionally discovered that there have been 174,000 partial interest-only home-owner mortgages excellent on the finish of 2024, representing 13.0% fewer than within the yr prior.
The whole interest-only mortgage inventory has diminished by 78% in quantity and 61% in worth since 2012, when information was first collected.
Of these, the variety of interest-only loans at 75% loan-to-value (LTV) and better fell by 25.7% in 2024.
Loans at increased LTVs make up 5% of the entire, in contrast with 36% in 2012.
In addition, the variety of interest-only loans set to mature by 2027 decreased by 67,000 in 2024, a discount of 35.8%.
UK Finance director of mortgages Charles Roe says: “In 2024, clients with interest-only mortgages continued to pay on or forward of schedule, with 150,000 fewer mortgages on interest-only phrases on the finish of the yr than at the beginning.”
“Lenders’ proactive communications methods proceed to make sure that these with historic interest-only loans have plans and skill to repay, with tailor-made assist accessible for many who don’t.”
“The interest-only guide has shrunk in measurement annually because the finish of the Financial Crisis and is now round one fifth of the quantity seen in 2012, when these information had been first collected.”
“It is especially encouraging that the numbers of interest-only loans at increased loan-to-value ratios has fallen sharply – round twice the general contraction – with an analogous motion in these loans set to mature over the following two years.”
“Those clients whose loans are theoretically most in danger proceed to redeem forward of time, decreasing the chance profile of the remaining interest-only guide.”
“The small variety of debtors who don’t repay instantly upon maturity stays very low, and information constantly point out the overwhelming majority of those do in actual fact repay in full over the primary few months following the top of time period.”
“As all the time, any clients frightened about repaying their mortgage ought to contact their lenders early, who stand prepared to assist with a variety of choices to repay.”
