James Moore: Sudden burst of interest in interest-only borrowers
Outlook Has the warm weather sparked off an unusual outbreak of harmony in the City? The Council of Mortgage Lenders says its members have at least contacted the majority of customers with interest-only loans that are due to mature by 2020.
These are a cause for worry, with good reason, because a lot of those who took them out did so without bothering to set up a repayment plan to pay off the capital when the term of their mortgages ends. Which leaves them in danger of losing the homes they have effectively been renting off their banks.
Via the CML, the industry has at least now recognised the issue and taken unusually prompt action. Even the Financial Conduct Authority is pleased.
But there's a sting in the tail. As the FCA notes, while people have been contacted, only a minority have responded. So there's still plenty of work to be done.
That's especially true for TSB. Yesterday The Independent revealed that 45 per cent of its mortgage book was interest-only. The industry figure is 25 per cent. It's going to start life as a public company in the naughty corner with a dunce's cap on.
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