Mortgage firm Paragon Mortgages has revealed that the first quarter of 2011 saw the highest ever proportion of repayment mortgages, as consumers realise that paying an interest only mortgage is no better than paying rent in a flat market.
And at least with renting the landlord has to pay for repairs and boiler breakdowns.
Paragons Financial Advisor Confidence Tracking (FACT) Index revealed that 77% of all residential mortgage deals were for repayment mortgages, for the period between January and March.
The figures are obtained from a panel of 200 mortgage intermediaries, and revealed a 6% increase in repayment mortgages, compared with the last quarter of 2010.
Paragon also revealed that the average number of mortgages introduced per office surveyed was also up, with each intermediary introducing 15.7 mortgages in the first three months of 2011, compared to 14.7 in the last three months of 2010.
John Heron, managing director of the firm said, “The Financial Services Authority signalled the demise of interest-only through changes proposed in the Mortgage Market Review and it appears that lenders are positioning their businesses in anticipation of regulatory changes.”
Paragon also revealed that 46 per cent of those surveyed has seen an increase in buy-to-let business in the first three months of 2011.