Rob Griffiths, associate director of AMI, commented: “We are pleased to see consumers have a deep understanding of interest-only mortgage products and believe mortgage intermediaries fill a vital role in imparting this knowledge to clients. Intermediaries are there to help consumers understand the risks of interest-only mortgages and make them aware of their ongoing repayment responsibilities.
“Interest-only mortgage products meet a clearly identifiable consumer need and continue to represent an affordable way for many to get on the housing ladder. We should remember that interest-only mortgage products are not just bought by one type of person with many different people using the product in different ways. Sophisticated consumers are increasingly taking out interest-only products and we are seeing a societal shift in the UK with many viewing their property as an asset like any other asset class.
“Levels of student debt look likely to rise and interest-only mortgages will continue to allow people to own their own home. Good intermediaries will help people manage their finances allowing them to obtain the benefits of home ownership whilst balancing any other loans in an affordable way. Intermediaries are also in a prime position to help those consumers who intend to change to a repayment mortgage later in the term. A good intermediary provides help in formulating a robust repayment plan and can advise on the range of repayment options that are available and suitable for the consumer.”
