Abbey tells consumers to be careful with interest only mortgages

21 October 2004
People with poor credit histories and first time buyers should tread carefully around interest-only mortgages, according to Abbey.

New figures released by the bank say that currently more than a million people are not saving enough to repay policies that they have already taken out.

The Abbey survey found that one in three interest-only policy holders do not have a savings in place to pay the loan off, and 37 per cent of those with a saving plan, running alongside their mortgage, said that it would not accrue enough to repay the mortgage.

"Every mortgage is going to have to be paid back eventually and borrowers should never lose sight of that. People should not go into an interest-only mortgage without a plan to repay," said Gary Hockey-Morley, director of Abbey mortgages.

"I am surprised by the number of people leaving things to chance," he added.
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