As their mortgage terms end relatively soon, the FCA said lenders have agreed to contact “at risk” borrowers to implore them to check their plans for repayment and consider the options available to them.

It follows research, commissioned by the FCA, into consumers’ ability to repay their interest-only mortgages when they mature.

The two studies – one by credit referencing agency Experian, the other by market researchers GfK NOP – suggest that, while many borrowers have a repayment strategy in place, many homeowners need to take control of their mortgage repayment planning.

Martin Wheatley, chief executive of the FCA, said: “My advice to borrowers is to not bury your head in the sand. Take action now. Understand the terms of your mortgage agreement and take control; work out if you can repay the outstanding amount when your mortgage matures. But you must engage with your lender to discuss how you propose to repay the outstanding loan.

“By acting now we are aiming to nip this problem in the bud.”

According to the research, around 600,000 borrowers will see their mortgage mature within the next seven years.

Though about 90% of interest-only borrowers have a repayment strategy – the FCA pointed out that many will have had a mortgage linked endowment policy – just under half of all interest-only borrowers are likely to have a shortfall.

For a third of these, the shortfall is expected to be more than £50,000, though the FCA said these individuals may be on relatively high incomes and possess other assets, giving them “back-up options”.

Over the next 30 years, the research’s findings are that 2.6 million interest-only mortgages will be due for repayment, with estimates suggesting almost half will face a funding shortfall at that time.