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Interest only mortgages 'can help with payment problems'
26 March 2008
Mortgage experts have said that taking out an interest only mortgage is a perfectly expectable way for homeowners to afford their repayments.
Bernard Clarke of the Council of Mortgage Lenders said that a rise in the number of people opting for this type of loan was not necessarily a bad sign.
He added that the trend is likely to have been influenced by a number of different factors which are currently affecting homeowners, including the popularity of the buy-to-let market.
According to Mr Clarke, interest-only mortgage could be a "perfectly rational approach" for some as long as they are aware of the consequences.
He added that the industry doesn't necessarily need to be concerned about the growing trend towards interest only loans.
"If they're [the homeowner] taking it from an informed point of view then there isn't a need for concern about that," Mr Clarke said.
"If borrowers are taking opportunities later when they remortgage to address the problem then that's fine."
