Citizens Advice has issued a warning about interest-only mortgages and the significant number of homeowners who do not have a plan to be able to pay them off. According to figures released by them, they estimate some 934,000 homeowners have no plan in place that will allow them to pay back the money they have borrowed once their mortgage term comes to an end. The latest estimates suggest that around 3.3 million homeowners currently hold an interest-only mortgage. This mortgage means the homeowner has to pay off the interest that accrues on the mortgage debt each month yet the capital amount they have borrowed remains untouched. Therefore if someone borrowed £200,000 on an interest-only basis 15 years ago, they would still owe £200,000 today and at the end of the term. Around a third of interest-only mortgage holders have no idea how to pay off the debt The reality is that Citizens Advice has revealed around a third of those with this type of mortgage have no plans in place to clear the amount by the time the mortgage comes to the end of its natural life. This is a stark figure and one that has hit the headlines in recent days. The presence of the new lending rules has also made it far more difficult for people in this situation to be able to rearrange their finances, borrow more money or even change their mortgage. A loan extension is deemed to be impossible for many with an interest-only mortgage, since they are now too old to be considered under the new terms. Problems could start cropping up in a year or two from now Interest-only mortgages are far from easy to get nowadays. However as we now know, millions did get them in the Eighties and Nineties. While some of those will already have reached the end of their term, another wave of them will mature in the next year or two. This means anyone with an interest-only mortgage that is on the verge of maturing should take a long hard look at what they are going to do to pay off the capital amount borrowed. Indeed, Hugh Stickland, speaking on behalf of Citizens Advice, said that people should seek their advice if they are worried about finding the cash to pay off an interest-only mortgage. Repossession or the need to sell and downsize to find the cash may become very real prospects for anyone in this situation. Clearly the message is that everyone with an interest-only mortgage who does not already have a clear plan in place to pay off the capital needs to do so now. With a very real chance their mortgage will be coming to an end very soon, their home could be in jeopardy if they do not assess the prospects of paying off the sum owed. The Financial Conduct Authority has confirmed that it expects a series of repossessions to occur from 2017 through to 2018 as a result of these mortgages coming to an end for some homeowners.