The number of partial interest-only mortgages rises while pure interest-only mortgages have almost halved in the past six years, UK Finance figures show.

The trade body’s research found there are currently 1.7 million outstanding interest-only mortgages (including partial interest-only), down 46 percent since 2012, when the data was first collected. The total value of the interest-only mortgage book is £250bn, down 37 percent in the same period.

There were 1,293,000 pure interest-only homeowner mortgages outstanding at the end of 2017, a 14.9 percent fall over the last year.

Meanwhile, there were 429,000 partial interest-only homeowner mortgages outstanding at the end of 2017, a 2.1 percent rise over the last year.

The number of interest-only loans at higher (over 75 percent) loan-to-values fell by 13.9 percent in 2017. Loans at these higher loan-to-value ratios (LTVs) now make up 13 percent of the total, compared to 16 percent in 2016 and 36% in 2012.

Separate analysis by UK Finance shows that of the one million interest-only loans due to mature by 2020 that was live at the end of 2012, only around 200,000 now remain. While making contact with borrowers who are more reluctant to engage remains a challenge, UK Finance said, there is also evidence that lenders are seeing greater success and the “vast majority” of borrowers who do engage have repayment plans in place.

Despite the findings, Financial Conduct Authority (FCA) figures from the beginning of 2018 show full interest-only and part capital repayment mortgage accounts in the UK represent around 17.6 percent of all outstanding accounts. The regulator remains concerned that a “significant number” of interest-only customers may not be able to repay the capital at the end of their mortgage and could lose their homes.

Jackie Bennett, director of mortgages at UK Finance, said: “The number of outstanding interest-only loans has halved in the past six years, with a particularly steep decline in higher loan-to-value mortgages. Many borrowers continue to redeem ahead of schedule or switch to a repayment mortgage.

“However, there remains plenty more work to do over the coming years to ensure that those remaining borrowers who have so far been reluctant to engage have viable repayment plans in place.

“We continue to encourage all borrowers with interest-only mortgages to contact their lender as soon as possible, as the sooner they do so the more options will be available. UK Finance will also be developing new best practice for lenders in this area, to reflect the changing regulatory landscape and help the industry engage successfully with more borrowers.”