Interest Only Mortgages
Understand your Interest Only mortgage portfolio, benchmark it to the market and develop your strategy to limit non-repayment.
In 2013 the Financial Conduct Authority conducted a thematic review on the maturity of Interest Only mortgages and subsequently issued guidance on the fair treatment of customers who are unable to repay the capital sum at the end of the term. The objective being to minimise the risk of non-repayment through early and effective engagement with customers over the mortgage term.
An Interest Only mortgage review provides a comprehensive analysis of your Interest Only mortgage portfolio, forecasts the equity position at the end of the mortgage term and provides the available options to each group of customers to repay the capital.
How does it work?
Using a combination of the customers secured borrowing, information on the current property value, forecasts of house prices at a local authority level and the propensity for a customer to hold savings and investments; groups of interest only mortgages are identified on which to prioritise proactive strategies.