Moneysupermarket.com has reported that 23% of mortgage holders are currently only paying off the interest on their mortgage, despite lenders dramatically reining in interest-only lending.
Analysis from moneysupermarket.com shows with mortgage interest rates having fallen dramatically over the last 12 months, the move to capital repayment with their current lender on the same terms will only cost around £25 and current interest only borrowers will see their monthly repayment increase by around £50 per month more than they were paying 12 months ago. Over the 300 month life of the mortgage, this switch will save approximately £40,000.
Hannah Skenfield, mortgage channel manager at moneysupermarket.com, said: “It is encouraging to see lenders restricting access to interest only mortgages