CML says interest-only mortgages suit certain customers

Date:Friday 1st October 2010
Author: Susanna Kavka

The Council of Mortgage Lenders (CML) has urged the FSA to consider that interest-only mortgages are suitable for certain types of customers.

Michael Coogan, director general of the organisation, made his comments regarding a consultation by the Financial Services Authority (FSA) on this category of home finance deals.

He said: "We do not want to see measures that would effectively regulate them out of the market and we believe it is possible to address the FSA's concerns."

In his opinion, interest-only mortgages are a sensible choice for people such as buy-to-let investors, borrowers who sign up for such an arrangement instead of renting and wealthy clients who have the required capital "in the long term".

The CML welcomed the FSA's decision to look into this type of mortgage, but advised against restricting customer choice with new regulations.

Last month, the institution highlighted how people who receive income support for mortgage interest will see their rate drop to 3.63 per cent from today (October 1st).