26 Aug

Quarter of mortgage holders on interest-only deals

Quarter of mortgage holders on interest-only deals

Almost a quarter of UK mortgage holders are currently on interest-only deals, according to a report.

Analysis from price comparison site moneysupermarket.com shows that borrowers could save around £40,000 over the life of their mortgage by switching to capital repayments.

Hannah Skenfield, mortgage channel manager at moneysupermarket.com, said that it is encouraging to see lenders restricting access to interest-only mortgages, but the fact that 23 per cent of mortgage holders are still only repaying interest on their mortgage debt is "deeply concerning".

"Unfortunately, those currently on interest-only deals are not paying off any of their capital and are setting themselves up for a bill at the end of the life of their mortgage," she said.

The news comes after the Bank of England announced earlier this month that August would be the fifth consecutive month that the base rate is kept at 0.5 per cent, having last been cut in March.

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