Interest-only mortgage payers advised to change

Many of those on interest-only mortgages are not taking advantage of the low base rate, an expert has noted.

Director of financial advisory firm MyMortgageDirect Catherine Hearnden observed that those on some tracker mortgages are now paying “virtually nothing” in repayments.

For those on interest-only deals, now is a good time to overpay or switch, but many are not doing so, she noted.

“The rate has gone down and the amount they are paying out has gone down, but they haven’t taken advantage of that to convert to repayments,” Ms Hearnden stated.

She rejected the argument that this is too expensive, stating that to switch or overpay now is as cheap as it ever will be.

The mortgage market has recently seen the number of variable rate deals being taken out more than doubling, broker John Charcol has said.

According to the firm’s figures, these have risen from 16.9 per cent of all deals in June to 34.7 in July.

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