Repayment mortgages hit record high

People in the market for cheap mortgages will welcome the news that repayment home loans have hit a record high.

Paragon Mortgages' Financial Adviser Confidence Tracking FACT Index found that 77 per cent of residential mortgages introduced in the first quarter of 2011 were capital repayment deals, the highest proportion since the study began.

It saw an increase of six percentage points recorded in the last quarter of 2010 and the figure has been rising steadily since the six year low of 57 per cent recorded in the third quarter of 2007.

"FACT shows that residential mortgage lenders have been clamping down on interest-only since the start of the credit crunch and the decline of this market shows no signs of slowing down," said John Heron, managing director of the company.

Nationwide has meanwhile cut its mortgage rates by up to one per cent for new and existing homebuyers who only have a small deposit.

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2011-05-11 13:03:57 © Moneyextra.com