INTEREST-only borrowers are being warned about "a ticking mortgage timebomb" that could see them having to sell their home to pay off their original loan.

Nearly one in five mortgage customers has an interest-only home loan, according to the Financial Conduct Authority (FCA), which is urging people with this type of deal to talk to their lender.

Unlike repayment mortgages, interest-only deals allow borrowers to only pay the interest off, rather than paying down the loan itself. Home owners need to have plans in place for how they eventually plan to pay back the amount they borrowed, or face selling their home to repay the capital.

Interest-only mortgages are set to mature in three waves. The first one is happening now, and many home owners in this wave have larger amounts of equity, having benefited from house price rises.

The next two predicted peaks in 2027/2028 and 2032 include less affluent people who could be more at risk of cash shortfalls.

Lenders have been writing to customers before their mortgage matures, but the FCA says customer engagement rates with firms have been low. The FCA also says borrowers should remember it is their responsibility to pay off the loan. The earlier they speak to their lender, the more time they will have to make a difference.

Help or advice can also be sought from the Money Advice Service or Citizens Advice.