Consumers taking out interest-only mortgages in the main have a reasonable understanding of the risks involved but a minority of borrowers do not have robust repayment strategies in place, according to a report published by the Financial Services Authority.
A study published this morning by the FSA and produced by IFF Research - entitled Interest-only mortgages: consumer risks - indicates 24% of new mortgages are taken out on an interest-only basis but only a very small number of people just 13% of those questioned – do not have any savings vehicle in place to repay the loan, albeit some have an idea of how they intend to do so. More importantly, 92% of those questioned say they understand what is meant by an interest-only mortgage and had a reasonable understanding of the risks associated with such a mortgage. And 84% of those questioned cl...
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