{"id":816,"date":"2013-06-17T21:22:06","date_gmt":"2013-06-17T21:22:06","guid":{"rendered":"http:\/\/my-brains.co.uk\/jackross\/jack-ross-news\/?p=816"},"modified":"2013-06-17T21:22:06","modified_gmt":"2013-06-17T21:22:06","slug":"repayment-warning-for-interest-only-borrowers","status":"publish","type":"post","link":"https:\/\/my-brains.co.uk\/jackross\/repayment-warning-for-interest-only-borrowers\/","title":{"rendered":"Repayment warning for interest-only borrowers"},"content":{"rendered":"<h2><span style=\"font-size: 16px;\">Interest-only mortgages were popular during the housing booms of the early nineties and &#8216;noughties&#8217;. Typically, borrowers make monthly repayments that cover only the interest on the amount borrowed. The capital (the full amount borrowed) is then paid back when the mortgage term matures &#8211; typically after 25 years &#8211; using funds such as savings or inheritance, usually with the hope that the property will have increased in value.<\/span><\/h2>\n<p>However, a recent report by the Financial Conduct Authority (FCA) warned that some borrowers with interest-only mortgages that are due to mature within the next seven years may be unable to fully repay their loan.<\/p>\n<p>Key figures from the FCA report:<\/p>\n<ul>\n<li>600,000 borrowers will see their mortgages mature before 2020<\/li>\n<li>Around 90 per cent will have a repayment strategy in place<\/li>\n<li>Just under half are likely to have a shortfall<\/li>\n<li>A third are expected to see a shortfall of over \u00a350,000<\/li>\n<li>Around 2.6 million interest-only mortgages will mature within the next 30 years, leaving over a quarter of a million unable to repay their loan.<\/li>\n<\/ul>\n<p>Whilst some are prepared for the shortfall, the FCA believes the number affected and the amount owed will be much higher than many anticipate. Of those surveyed, a shortfall would most likely be paid through savings (21 per cent), by downsizing their home (19 per cent) or by re-mortgaging (15 per cent).<\/p>\n<p>The FCA will now ensure lenders first contact all borrowers who are due to repay their mortgages in the next seven years, prompting them to re-check their repayment plans and to consider the options available to them.<\/p>\n<p>Martin Wheatley, chief executive of the FCA, said: &#8220;My advice to borrowers is to not bury your head in the sand \u2013 take action now. Understand the terms of your mortgage agreement and take control; work out if you can repay the outstanding amount when your mortgage matures. But you must engage with your lender to discuss how you propose to repay the outstanding loan.&#8221;<\/p>\n<p><em>We can advise on mortgage repayments and help set up repayment strategies.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Interest-only mortgages were popular during the housing booms of the early nineties and &#8216;noughties&#8217;. Typically, borrowers make monthly repayments that cover only the interest on the amount borrowed. The capital (the full amount borrowed) is then paid back when the mortgage term matures &#8211; typically after 25 years &#8211; using funds such as savings or&hellip;&nbsp;<a href=\"https:\/\/my-brains.co.uk\/jackross\/repayment-warning-for-interest-only-borrowers\/\" class=\"\" rel=\"bookmark\">Read More &raquo;<span class=\"screen-reader-text\">Repayment warning for interest-only borrowers<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","neve_meta_reading_time":""},"categories":[3,12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Repayment warning for interest-only borrowers - Manchester Chartered Accountants<\/title>\n<meta name=\"description\" content=\"Interest-only mortgages were popular during the housing booms of the early nineties and &#039;noughties&#039;. 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