Numbers of the mortgages coming to the end of their term this year shrank by 72,000 in 2019, as lenders continue to take steps to help borrowers move off the deals or pay off outstanding capital.
There are now 8.9 per cent fewer borrowers on the deals than in 2018, according to UK Finance statistics.
There were 318,00 partial interest-only mortgages outstanding in 2019, 11.7 per cent fewer than a year earlier.
Overall, total interest-only mortgages and value have shrunk by half since 2012.
The proportion of higher loan to value interest-only mortgages have also been falling.
Loan to values over 75 per cent fell by a quarter in 2019 and make up 11 per cent of the total, compared to 36 per cent in 2012.
In an online blog on the issue, James Tatch, principal of analytics at UK Finance, wrote: “The significant 26 per cent year-on-year reduction in these higher-LTV loans last year comes in a year when house price inflation was relatively modest (1.1 per cent as measured by HM Land Registry data).
“This indicates that, with house price increases contributing only a marginal uplift in equity stakes, positive actions by customers, helped by pro-active communication strategies by lenders, have continued to help move those at potentially higher risk either down the risk curve (by paying down some of the capital) or, by redeeming in full, out of the interest-only book entirely.”
