Your Mortgage rep says interest-only deals can be useful

Date:Friday 15th October 2010
Author: Susanna Kavka

A spokesperson for Your Mortgage has claimed that interest-only home finance products do serve a purpose.

Editor-in-chief of the website Paula John accepted it is important that regulations are put in place to avoid people taking on such deals if they cannot afford them.

However, she pointed out that lenders are extremely cautious at the moment anyway and interest-only mortgages are useful for certain people.

Her comments were made in response to a statement by the Intermediary Mortgage Lenders Association (IMLA), which declared that such products would be made obsolete if the Financial Services Authority (FSA) goes through with a set of new proposals.

Ms John said: "I think [the IMLA] is right in sounding a warning bell that we could throw the baby out with the bath water and see the end of interest-only mortgages altogether."

In her opinion, the FSA is right to want to get involved, but it may be that the market has regulated itself with tightened lending conditions.