Interest-only deals see borrowers pay only the interest on the loan during the life of the mortgage. They must then repay the full capital when the mortgage term ends.
They grew in popularity in the run-up to the financial crisis in 2008, but concerns were raised the products were enabling customers to purchase otherwise unaffordable properties.
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Observers say this led in part to the introduction of tougher checks around affordability and repayment plans as part of the Mortgage Market Review in 2014.
rachel.mortimer@ft.com
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