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Nearly one million 'face difficulties' in paying off their mortgages

07 Sep 2015

Almost one million homeowners cannot pay off their mortgages due to opting for interest-only loans, reports Citizens Advice.

According to the charity, 934,000 homeowners do not have a plan for repaying the money at the end of the mortgage term.

The new figure is significantly higher than estimates provided by the City watchdog, the Financial Conduct Authority (FCA).

Citizens Advice also warned that there is little time left for some to organise their finances.

Some homeowners are facing the possibility of having to sell their homes or even having their properties repossessed if they cannot find other funds.

Millions of home buyers were sold interest-only mortgages prior to the revision of mortgage rules three years ago.

Previously, home buyers could borrow more to purchase their ideal homes without needing to pay back some of the loan each month on top of interest.

Banks and building societies have been informed by regulators to warn their customers in writing of the financial danger that they could face.