MILLIONS of interest-only mortgage holders are set to be clobbered as their loans expire over the next eight years, property data firm Xit2 revealed today.
Some 1.3m interest-only mortgages will expire by 2020, the data shows, and for over 1m of these – together worth about £116bn – there is no final payment plan, Xit2 says. “If lenders fail to help these borrowers find a repayment vehicle, it will come back and give them a nasty bite around 2020,” said Xit2 boss Mark Blackwell.
Since 2002, some 14 per cent of home purchase loans have been interest-only, and have no final payment plan, the research says. By 2008 just before the financial crisis, these made up around 30 per cent of new loans.