The commitment, given by mortgage lenders to the FCA, was to contact interest-only borrowers whose mortgages are due to mature by the end of 2020 about how they plan to repay their loans.
The CML and lenders nevertheless recognise that meeting this commitment is only the first part of an ongoing programme of communication with interest-only mortgage customers.
The CML surveyed members on their communications, and found that those borrowers who should have been contacted have been. The only notable exceptions in the communication programme were those with very small balances where there is little material risk, and those with whom lenders were already in contact.
Among those borrowers who have responded, around four out of five already had a clear plan. Among those who did not, the survey found that the solutions and approaches lenders are offering typically include term extensions, permanent conversions to capital and interest, and overpayments.
CML director general Paul Smee commented:
"We are pleased to report that lenders have met their initial commitment to contact interest-only borrowers whose mortgages are due to mature by the end of 2020. But we all recognise that this is just the start of a long term, continuous communication programme.
"So far, around 30% of customers who have interest-only mortgages maturing by 2020 have responded to their lender on their repayment plans. This is an encouraging start, but also highlights the challenges of achieving effective two-way communication.
"If you have an interest-only mortgage due to end before the end of 2020 and you have not yet responded, it is important to communicate with your lender, even if you know your plans are on course. If they are not, your lender will want to work with you to help minimise any difficulties."
