The Financial Services Authority (FSA) in the UK said it will not ban interest-only housing loans in its business plan for 2011 to 2012.
In October 2009, the regulator proposed significant reforms to the UK mortgage market, which included banning “self-certification” mortgages and making lenders accountable for assessing a borrower’s ability to pay.
Thought to be under threat and after setting its goals in relation to its Mortgage Market Review (MMR), interest-only mortgages appear to be the “appropriate” financial method for some borrowers.
A full list of proposed MMR rules will be published in summer 2011. The regulator said that it has no intention of taking a “one size fits all” approach.