Powered by MOMENTUM MEDIA
Mortgage business logo

FCA praises interest-only mortgage commitments

The UK’s APRA equivalent has welcomed news from the Council of Mortgage Lenders that British lenders have contacted interest-only borrowers whose mortgages are due to mature by the end of 2020.

The Financial Conduct Authority (FCA) completed a thematic review of interest-only mortgages last year.

As a result of the review, lenders made a commitment to the regulator to contact interest-only borrowers and find out their plans for repaying their loans.

Lenders have met that commitment, but only 30 per cent of customers have responded to date, according to the FCA.

FCA chief executive Martin Wheatley said he was pleased industry, regulator and consumers have addressed the problem collaboratively.

“This forward-looking and 'consumer at the heart' type of action is a prime example of a model demonstrating good conduct outcomes and putting customers first; it’s good to see real progress is being made,” Mr Wheatley said.

“Our advice for borrowers is unchanged: you must engage with your lender; this is a shared problem and you need to work together to resolve it,” he said.

md discover

The UK has seen a significant reduction in lenders’ interest-only back books, which dropped by 12 per cent between the fourth quarter of 2012 and the fourth quarter of 2013, compared with the same period a year earlier when the reduction was less than two per cent.

 

Share this article
brokerpulse

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

brokerpulse graph

What are the main barriers to securing a mortgage at the moment?