Customers with interest-only deals expiring can remortgage, downsize or take out equity release depending on the level of equity in their homes.
There will be three peaks where people’s interest-only deals mature – in 2017/2018, 2027/2028 and 2032, said Leeds Building Society head of intermediary distribution Louisa Sedgwick this morning.
Speaking at the Mortgage Business Expo Leeds 2016 at the Royal Armouries, Sedgwick labelled the 2017/2018 group as ‘endowment shortfall borrowers’ who took out inflated endowment mortgages in the early 1990s and are forced to work longer to pay off their mortgage, the 2027/2028 group as ‘interest-only remortgagors’ who remortgaged in the mid 2000s and the 2032 group as people who bought at the market’s peak between 2005 and 2008.
Sedgwick said: “This is a big threat to the market but the opportunities are massive because solutions are available for these customers.”
Customers with interest-only deals expiringcanremortgage, downsize or take out equity release depending on the level of equity in their homes.
In order to keep hold of their homes Sedgwick reckoned borrowers need at least 25% equity.
Leeds is just one lender providing a solution as it offers part and part interest-only mortgages up to 75% loan-to-value.
