The number of pure interest-only homeowner mortgages outstanding fell by 17.7% in 2025 to 445,000, according to latest figures from UK Finance.
In addition, there were 156,000 partial interest-only (part and part) homeowner mortgages outstanding at the end of 2025, 10.3 per cent fewer than in 2024.
The total interest-only mortgage stock (including part and part) has reduced by 81 per cent in number and 65 per cent in value since 2012 (when these data were first collected).
Within the total, the number of interest-only loans at higher (over 75 per cent) loan-to-values fell by 26.9 per cent in 2025. Loans at these higher LTVs now make up just 4 per cent of the total, compared with 36 per cent in 2012.
Additionally, the number of interest-only loans set to mature by 2027 shrank by 60,000 in 2025 to 60,000 loans, a fall of 50 per cent.
UK Finance said “In 2025, customers with interest-only mortgages continued to pay on or ahead of schedule, with 114,000 fewer mortgages on interest-only terms at the end of the year than at the start.
“The interest-only book has shrunk in size each year since the end of the Financial Crisis and is now less than one-fifth of that seen in 2012, when these data were first collected. Although the overall stock of outstanding interest-only loans continues to decline, we have seen a small increase in lending on a part-and-part basis.
“This signals its potential as a tool to help plug the affordability gap, where appropriate for the customer’s circumstances.”
