Nearly a million people could have their homes repossessed because they have no way of paying off their interest-only mortgages, Citizens Advice has warned.
New research from the national charity estimates that 934,000 people have interest-only mortgages and do not have a plan on how to pay it off when their term ends.
Time is running out for some people who will either have to sell their homes, find the capital to pay off the debt or could risk having the property repossessed.
Some of the people who came to the consumer champion said they were not made aware that they would need to repay the capital at the end of their term.
The average shortfall was previously estimated to be £71,000.
Citizens Advice chief executive Gillian Guy said: “People buy a home for stability – but interest-only mortgages have forced many into a financial black hole.
“It is good rules around these mortgages have changed, but there are many people who previously took out these products and face losing their home.
“Lenders have to exhaust all other options when borrowers get into arrears – it’s time to level the playing field so that interest-only customers get the same protections when their mortgages mature.
“It is also important that people can get independent advice, guidance and support about how they can plan and manage their finances.”
The charity says that in the UK there are 3.3 million mortgage holders who have interest-only products.
Rules were tightened in 2012 to ensure interest-only mortgages were no longer available without a repayment plan, which has resulted in a major drop in the number of products sold.
Citizens Advice supports this change, but says people who already hold these mortgages need more support.
The Financial Conduct Authority (FCA) has said that due to previous peaks in the sale of interest-only mortgages, they expect there to be waves of potential repossessions – 2017-18, 2027-28 and in 2032.