Prisoners to their mortgage

September 7, 2015

Many interest only mortgages are fast reaching the end of their term, those mortgage holders who have not made plans as to how the original sum borrowed will be paid off could face repossession at the worst, nearly a million people are in such a situation because they have interest-only mortgages they just cannot pay off, some retirees are being forced to sell-up and move to a smaller home to pay down their debt.

According to the The Citizens Advice Bureau, 934,000 interest only mortgage holders do not have a plan in place to repay in full the mortgage, in fact 432,727 say they haven’t even thought about it. The Financial Conduct Authority has calculated that 300,000 homeowners will struggle to pay back interest-only mortgages over the next five years and around 600,000 interest-only mortgages will reach the end of their term by 2020 and half of those could become mortgage prisoners.

The charity CAB says that in the UK there are 3.3 million mortgage holders who have interest-only products, of these, the survey shows that around 1.7 million have no linked repayment vehicle such as an endowment or ISA.

Citizens Advice chief executive Gillian Guy reportedly said, “People buy a home for stability – but interest-only mortgages have forced many into a financial black hole.
“It is good rules around these mortgages have changed, but there are many people who previously took out these products and face losing their home.”

Interest-only mortgage holders don’t have the same protections when their term ends as other mortgage holders do when they fall into arrears, in 2013 the FCA asked banks to contact all borrowers with interest-only mortgages ending before 2020 about how they plan to repay, only around 30% of borrowers responded

Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

You May Also Enjoy

Estate Agent Talk

Is it worth buying a fixer-upper property?

The latest research from eXp UK reveals that fixer-upper homes can be picked up for an average saving of more than £44,000, but when the cost of renovating the property is accounted for do homebuyers actually stand to make a saving? And what chance do buyers have of finding one on today’s market? Fixer-uppers are…
Read More →
Breaking News

Nottingham letting agents are the busiest in Britain

The latest research from Propoly reveals that across Britain’s major cities, there are an average of 13.5 rental listings for each single letting agency branch, with the nation’s busiest agents found in Nottingham where this figure climbs to 35 properties per professional. Propoly has analysed the estimated number of current rental listings in 21 of…
Read More →
Breaking News

The six protections every new-build buyer must check before signing

With 53% of homebuyers saying they would prefer a new build, demand remains high, but so do the risks if buyers fail to ask the right questions. Buying a new build often means committing to a property that is not yet finished, which makes the small print just as important. Without these protections, buyers risk…
Read More →
Breaking News

Rental price and average salary tracker – February 2026

Regional divergence replaces winter slowdown as rental market shows mixed February movement Month-on-month rental prices showed a mixed picture in February. Notable increases were recorded in the East Midlands (+3.4%), North West (+2.8%), Scotland (+2.7%) and South East (+2.0%), suggesting demand has firmed in several areas. However, Northern Ireland (−6.6%), West Midlands (−1.3%), East of…
Read More →
Breaking News

UK property sector gender pay gap keeps getting wider

UK property sector gender pay gap keeps getting wider and It now has the fourth largest gap across all UK industries The latest research from Yopa reveals that real estate remains one of the UK’s worst-performing industries when it comes to the gender pay gap, ranking as the fourth largest across all sectors after widening…
Read More →
Rightmove logo
Breaking News

Britain’s most expensive streets revealed

The latest edition of Rightmove’s Most Expensive Streets report reveals that Winnington Road in Barnet, London, retains its position as Great Britain’s most expensive street, with an average asking price of £12,538,095 Chester Square in Westminster is second, with an average asking price of £11,546,428 and The Bishops Avenue in Barnet is third, with a price tag of £8,930,650 East Road…
Read More →