In 2002, the proportion of mortgages bring repaid by this method was at a peak of around 88%.
But over the following five to six years the proportion fell to a low of 67%.
Meanwhile, the number of mortgages set up as interest-only products with no specified repayment vehicle increased quite markedly – accounting for some 20% or more.
Then in 2008 there was a reduction in the proportion of mortgages being set up as interest-only with no specified repayment vehicle, to 14% for the year.
And in the last quarter of 2008 and the first month of 2009, the proportion of cases set up on this basis fell to just 9%.
This compares with 80% of borrowers electing to repay their mortgages on a capital and interest repayment basis.
The rapidly reducing cost of borrowing has helped borrowers, with a smaller percentage of net income now required to service a mortgage.
More and more people are now electing to repay their mortgages on a capital and interest repayment basis from the outset.
Brokers who still have clients for whom they set up interest-only mortgages with no specified repayment vehicle should now be using the favourable pricing environment to look at reappraising those arrangements.