Consumers paying off interest on homeowner loans

Consumers are concentrating on repaying interest accrued on their homeowner loans, according to new figures.

Research released by online mortgage company mform.co.uk reveals homeowners increased average mortgage repayments by 69.64 per cent between 2001 and 2006.

Chief executive Eamonn Rice said: “These findings are encouraging because although interest repayments are rising people are increasingly trying to pay off the capital they owe on their homes with the aim of becoming mortgage-free as quickly as possible.”

Mr Rice added that consumers should look to get a competitive homeowner loans to ensure more of their money goes towards paying off capital.

The study also revealed that of the average £4,113 made in mortgage repayments, some £2,267.20 went towards paying off interest.

However, the Council of Mortgage Lenders (CML) reported that as the number of consumers with interest-only mortgages rose by 33 per cent in 2006 to 222,400, it expressed concern into how borrowers intended to pay off their homeowner loans.

An earlier CML study revealed a record £26.8 billion was released via homeowner loans last month, a rise of 16 per cent from the same month in 2006.

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