Formal term extensions for a fixed, usually relatively short period, are more common in the first year or two.
For term-expired mortgages that persist for longer without redeeming, increasing numbers are switched to repayment terms and progressively pay off the loan that way. A number of customers also sell their properties to pay the capital.
However, there are a very small number of cases when, after all options have been exhausted, the borrower has no realistic chance of repaying the loan.
Data from UK Finance has said the incidence of repossession among term-expired interest-only loans is very low indeed, even in the context of the current benign environment where mortgage possessions overall are near 40-year lows.
ima.jacksonobot@ft.com
