Interest-only mortgages fell 6.9% in 2022

Latest UK Finance has found that the number of interest-only homeowner mortgages fell 6.9% to 702,000 last year compared to 12 months.

The figures for partial interest-only home loans fell by 11.9% to 222,000 over the same period.   

There are now 924,000 interest-only mortgages outstanding, just over one quarter of the 3.2 million that were in place in 2012, when we first started collecting these dat

Last year there were 33,000 new interest-only loans granted worth £12.2 billion, which represents 3% of total new mortgage lending.  

UK Finance says that Interest-only mortgages had been a permanent fixture in the UK mortgage market over the years, particularly through the 1980s and 1990s.

UK Finance Director of Mortgages Charles Roe said “Even as cost-of-living and rate pressures built through 2022, interest-only mortgage customers continued to repay their loans, many well ahead of the scheduled maturity date.”

“Lenders continue to refine their targeted programmes to reach out to their interest-only customers, yielding positive results in ensuring borrowers are on track to repay. ”

“The small number of borrowers who do not repay immediately upon maturity remains very low, and data indicate the vast majority of these do in fact repay in full over the first few months following the end of term.”