UK Finance has revealed there were 664,000 pure interest-only homeowner mortgages remaining at the end of last year, 5.4% fewer than in 2022.
According to the body’s latest data, there were 200,000 partial interest-only homeowner mortgages at the end of 2023, 9.9% fewer than the previous year.
Additionally, the total interest-only mortgage stock – including part and part – was 73% lower in number and 56% lower in value since 2012, when collection of this data began.
Despite the fall in overall interest-only stock, the number of interest-only loans at higher loan-to-values (LTVs) – over 75% - increased by 2.9% in 2023.
However, loans at these higher LTVs accounted for only 5% of the total, compared with 36% in 2012.
The number of interest-only loans set to mature by 2026 fell by 74,000 last year to 187,000, a drop of 28.4%.
Charles Roe, Director of Mortgages at UK Finance, said: “Although the mortgage market saw difficult conditions in 2023, most interest-only borrowers continued to repay on or ahead of schedule.
“The regular communications from lenders will have helped ensure interest-only borrowers remained on track to repay.
“The number of interest-only mortgages has dropped each year since the end of the financial crisis and fell again last year to around a quarter of the number seen in 2012.”
He added: “The number of borrowers who didn’t repay when their mortgage ended remained very low and most of these borrowers did repay within a few months of the term ending.
“If you are struggling with your mortgage repayments, please reach out to your lender as soon as possible.
“Lenders offer a range of support to anyone worried about their finances, with teams of trained experts ready to help.”
