Sinclair, speaking at The Mortgage Event 2012 in Manchester, told an audience of mortgage advisers that the MMR rules had not caused withdrawal of several big lenders from the interest-only space.
Responding to broker fears that interest-only would disappear completely due to regulatory changes, Sinclair said recent moves were due to pressures on balance sheets at major lenders.
“The disappearance of interest-only is not down to the MMR rules but is because of lenders acting on a prudential basis. That’s because from a bank’s perspective it is tough to meet the capital adequacy for these mortgages.
“But interest-only is a great product for many people and we will see it return, just not now.”
He later said that the MMR rules regarding High Net Worth clients being allowed to take mortgages on an execution-only basis would not alter the wider market and would largely affect private banks.
“I see private banks building product ranges for these customers and sitting outside the rules.
“I don’t see regular banks changing to offer a standard product range and then creating some more products for High Net Worth customers.”
