Interest only remortgage products remain appropriate in certain circumstances.
The MMR consultation paper in December conceded interest only remortgage deals remain appropriate in certain situations which is good news for those of you still looking for an interest only deal.
However while conceding there is still a place for interest only remortgage deals, the MMR made a ban on any repayment method that relies on property price rises.
However the regulator has accepted that there is very little correlation between mortgage arrears and interest-only deals but believes this is due to mortgage payments being cheaper.
Interest only could once again become the preserve of niche mortgage lenders. Beginning as a niche product offered to a select group of customers, over time it became more mainstream and was taken advantage of some borrowers without sufficient income for a straight repayment mortgage.
Interest-only mortgages are higher risk and should be handled with care but lenders should not remove them from their product range. We at Deal Direct believe that the regulator has failed to grasp the fact that responsible mortgage advisers offer interest only deals only to appropriate customers.
Fortunately despite FSA changes to interest only deals and some lenders tightening their criteria, interest only products still remain available.
For those who are looking for interest only remortgage deals Deal Direct can help. We are 'whole of market brokers' who are up to date on lenders latest offers and are well placed to find you a great deal.
