Interest-only mortgages

The CML interest-only toolkit

In 2010 the CML started working with members to identify and mitigate repayment and conduct risks associated with existing interest-only mortgages.

As part of this work, the CML has developed an Interest-Only Toolkit which is intended to help and inform lenders to develop policies and actions related to existing interest-only mortgages. The toolkit is not prescriptive – rather it sets out a framework which we believe will allow members to develop a strategy which is appropriate to their business model and, crucially, helps them to meet the needs of their current interest-only customers.

On 2 May 2013, to coincide with the launch of the outputs from the FCA's thematic review into interest-only mortgages, the CML made the toolkit publically available. Further information on the publication of the FCA's interest-only thematic can be found on the FCA's website.

The latest version of the CML interest-only toolkit can be downloaded from the file below. It covers the following four main areas:

• An overview of the options for lenders and borrowers
• Reactive lender contact strategies
• Proactive lender contact strategies
• A spreadsheet matrix for members

The toolkit will continue to be refined, and its scope widened, as we continue to work with our members on interest-only issues.