StepChange Debt Charity welcomes FCA interest-only mortgage review

2 May, 2013

StepChange Debt Charity has welcomed today’s Financial Conduct Authority (FCA) review into interest-only mortgages.

StepChange Debt Charity director of external affairs Delroy Corinaldi said: “This review shows that the FCA is looking ahead and is prepared to tackle emerging problems that could cause considerable detriment to consumers if left unaddressed.

“The mortgage sector must show forbearance to borrowers, both in the short and long-term. The prospect of people facing eviction or repossession should be avoided as long as they can continue to afford to make payments. The FCA has clearly stated that through planning, consideration and engagement, borrowers and lenders should be able to establish viable repayment strategies, and we are hopeful that this will be the case.

“We welcome the FCA’s recommendations on engagement between firms and consumers. With 50 percent of borrowers set to repay their loans before 2020 facing a shortfall, it is essential that consumers are made aware of potential problems now.

“While action by the mortgage sector is essential, consumers must not be complacent that the passage of time or rising house prices might resolve any potential shortfall. Consumers must begin planning a repayment strategy and we urge them to contact their lender and begin this process at the earliest opportunity”.