Interest-only onus should be on clients

A massive 97% of The Mortgage Alliance’s directly authorised bro-kers believe borrowers should retain responsibility for repaying the capital on an interest-only deal.

TMA’s October Distribution Indicator survey follows the Council of Mortgage Lenders’ response to the Financial Services Authority’s Mortgage Market Review consultation on interest-only.

The CML proposed an alternative approach where borrowers retain responsibility for repaying the capital at the end of the term, not lenders.

Some 90% of those surveyed believe it is vital the right type of borrower has access to interest-only deals, with 7% stating it is extremely important and 3% important.

Phil Whitehouse, head of TMA, says: “The bottom line is that brokers and their clients need options on various types of products to en-sure they give and get the best advice possible.

“As long as there is some kind of robust capital repayment provision in place, illustrated clearly with the relevant reasons and plans, there should be no problems.”