U.K. borrowers are refinancing their interest-only mortgages nearly as fast as they refinance mortgages that amortize, and this is reducing the risk in non-conforming residential mortgage-backed securities, according to Moody’s Investors Service.

“As most interest-only loans continue to repay ahead of maturity dates, RMBS pools grow less vulnerable to high concentrations of interest-only loans, and thus to interest-rate increases and refinancing risk,” Steven Becker, a structured finance analyst, stated in a report published Tuesday.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.