Economic news

Number of mortgages decrease, FCA expresses concerns over interest-only loans

Less and less mortgages are getting approval at the time when consumers tend to choose credit cards, new data shows.

The number of mortgages has dropped to the lowest in three years as BOE’s report demonstrates. Last December’s count of new mortgages made up 61,039, which is the smallest quantity since January 2015.

Popularity of unsecured credit has gone up though, rising by 9.5% in December compared to the same period in the preceding year, while November figure was 9.3%.

Data that was released some time back in the month showed that banks extensively restricted unsecured credit. It also made known that the number of declined credit card applications was growing in the last quarter of 2017.

The Financial Conduct Authority has expressed concerns that excessive number of borrowers use interest-only mortgages, which could lead to loss of property in case they are unable to close mortgage before its end.

Banks made attempts to get through to borrowers but haven’t had much success, which forced the financial regulator to address them asking to contact their lenders so as to work out another variant.

The count of interest-only mortgages in Britain is around 1.67 mln, which is close to a fifth of the total quantity of mortgages.

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