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Interest-only mortgages could be an option, says CML

Interest-only mortgages could be an option, says CML

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Interest-only mortgages could still be a viable option for some house buyers, it has been suggested.

According to Bernard Clarke, communications manager of the Council of Mortgage Lenders (CML), this type of home loan "may still be a perfectly rational approach".

"We've seen a decline in the popularity of interest-only borrowing, certainly compared with those days, as people opt for the certainty of a repayment mortgage," he said.

However, Mr Clarke added if the buyer is "fully aware of the consequences" of an interest-only mortgage then it may well be a possibility for homeowners.

Furthermore, he remarked that buyers should ensure they have a plan in place so that they repay the capital during the length of the loan.

Recent data from mform.co.uk has found that interest-only mortgages have increased to 24.5 per cent of all advanced loans from 21 per cent in 2006.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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