The number of first-time buyers taking out interest-only mortgages is lower than that of movers, new research has revealed.
In total, 17 per cent of first-time buyers look to find a mortgage on an interest-only basis, compared with 25 per cent of borrowers who are moving house , according to a study from the Council of Mortgage Lenders .
Additionally, the survey found that borrowers paying only the interest are equally able to afford their mortgage repayments as other buyers.
The Council of Mortgage Lenders claims that the desire to find a mortgage is not forcing borrowers to take out interest-only deals which they cannot afford to repay.
Michael Coogan, director general of the body, commented: "The view that interest-only mortgages are being used as a dangerous short cut around affordability barriers is not borne out by our research."
Mr Coogan also noted that the Financial Services Authority is currently undertaking research into the factors which drive borrowers to look for interest-only mortgages.
According to a report in Business Review, interest-only mortgages accounted for 25.1 per cent of all property lending in the first quarter of 2006 - a rise from the 14.9 per cent recorded in the same period of 2005.
Fewer first-time buyers opt for interest-only mortgages, study shows
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