Time is running out for interest-only mortgages

If you’re on an interest-only mortgage, make sure you don’t get a nasty surprise when you’re hit with a final bill. Nearly one in five mortgage-holders has an interest-only home loan, meaning they would need savings or other funds to pay a final lump sum. The Financial Conduct Authority (FCA) says the end of these mortgage terms would peak in the next ten to 14 years.

One peak of these final bills has come in the past year or so, for those who took out endowment policies in the Nineties and 2000s. Many homeowners who converted to interest-only deals in 20032009 will see their final repayment demand come in 2027-2028. If you’re worried, there are government schemes that could help but the first step is to pick up the phone and talk to your lender.