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Lenders left in the lurk by interest only mortgages


New research by MoneyExpert shows that monthly mortgage repayment budgeting is causing major problems to UK homeowners and people are slowing down the tendency for lenders to carry out an interest-only mortgage.

MoneyExpert put a survey together and found out that fifth of lenders are indisposed on offering interest-only residential mortgages when people apply.

It has also been revealed that a fifth of 115 mortgage lenders state that they would not give money to customers until a form stating a special scheme was been filled out and completed.

Interest-only mortgages are starting to become more popular than before, CML the Council of Mortgage Lenders feel that the amount taken up last year increased by a third to over a staggering 222,000.

The consumer’s feel there is a big saving here and MoneyExpert estimates that a consumer on a discounted bundle could save 248 pounds 30 pence every month with a 150,000 mortgage.

Sean Gardner, chief executive of MoneyExpert stated, "As long as borrowers are aware of the risks then it can make financial sense to opt for an interest-only loan as the monthly savings are significant and can make the difference in being able to afford a mortgage."

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