Hobbs: interest-only mortgages ‘mis-sold’

MONEY expert Eddie Hobbs has accused financial institutions of “mis-selling” mortgages to vulnerable customers after Government figures reveal that there has been a tenfold increase in the number of people taking out interest-only mortgages since 2001.

The latest housing statistics from the Department of the Environment show more than 14,000 borrowers took out such potential high-risk loans in 2006.

It means interest-only mortgages accounted for 12.6% of all mortgage loans paid out by banks and building societies last year. In contrast, only 1,434 borrowers, or a mere 2.1% of all mortgages, were interest-only loans in 2001.