Data released today showed, despite the decline in high LTV mortgages, there was still a ‘healthy’ range of deals for borrowers wishing to take advantage of interest-only repayments options.

Moneyfacts’ figures show there are currently 1,666 products with an interest-only option, which represented 61% of all deals.

Pure interest-only deals are currently limited to 77 – down from 118 in March, before the crisis took hold. There were also 86 retirement interest-only (RIO) deals available, according to Moneyfacts.

But while there was more choice back in March – with 2,533 products with an interest-only option available – these deals represented less of the market overall.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “An interest-only mortgage could be a viable option for borrowers who have suffered financially as a result of the Coronavirus pandemic.

“Borrowers may well be seeking ways to reduce their monthly expenses, and an interest-only mortgage could do just that.”

She added: “Savings rates are at record lows and so if some borrowers have more disposable income, they may wish to pay off their debt rather than to save.”

Demand for interest-only

UK Finance announced last month the number of outstanding interest-only mortgages had dropped by 10% at the end of 2019.

But Legal and General Mortgage club revealed it had received a significant increase in broker enquiries about interest-only options between April and May 2020. ‘Interest-only mortgages’ was the third most popular search by advisers in the first week of May.

Springall suggested those customers coming off mortgage payment holidays may consider interest-only options as a way to manage repayments during these difficult times.