'Decline' in interest-only mortgages

It has been reported that there has been a decline in the number of interest-only deals in the mainstream residential mortgage market.

The Paragon Financial Advisor Confidence Tracking Index has revealed interest-only deals accounted for 23 per cent of mortgages introduced by financial advisors during the third quarter of 2008.

This is the second quarter in the row that there has been a decline. However, before this year, the last recorded fall in the proportion of such loan products was during the first quarter of 2004.

Interest-only loans are seen as a great way of helping out cash-strapped first-time buyers for the first couple of years, according to YourMortgage.co.uk.

Meanwhile, anyone embarking on a self build project who is short of cash could consider an accelerator mortgage.

This loan type releases the money for each stage of the development at the beginning of the various stages, rather than the end, allowing self builders to purchase materials and pay construction workers.