One in 12 respondents - 7.9 per cent - from a survey of 2,000 adults switched to an interest-only mortgage in the last three years, according to according to Ocean Finance.
This product sees the customer paying off the interest on the loan every month, but not repaying any of the capital, which makes the monthly repayments cheaper.
However, this means that at the end of the term they do not own the property and will need to find a lump sum to repay the debt, perhaps by selling their home.
One in six homeowners have revealed that in the last three years they have renegotiated the terms of their mortgage in order to keep up with their repayments.
Eighteen per cent of borrowers changed their mortgage details or come to a new arrangement with their lender in the last three years, whilst one in twelve have moved to interest-only mortgage.
The same number extended their mortgage term, meaning they could end up paying more.
Despite more than five years of record low interest rates, the squeeze on real incomes over the same period has left many homeowners struggling to keep on top of their monthly repayments, according to the provider.
Over eighteen per cent of homeowners with a mortgage admitted they had to take action of some sort to carry on meeting their payments, Ocean Finance’s poll showed.
Another step taken by 7.6 per cent of respondents was to extend the terms of their mortgage. This might mean extending the period of time they have to repay the loan from an initial 25 years to as much as 40 years.
Ian Williams, spokesman for Ocean, said: “While repossession figures have been low, this has masked the real struggle that many borrowers have had to keep paying their mortgage. As incomes have been squeezed over the past few years, one in six borrowers has had to find a way to reduce their monthly payment.
“Switching to an interest-only mortgage or extending the term are both being used as a way to lower repayments. While both of these can help provide short term relief and may serve to keep the roof over people’s heads, it may be that this is simply storing up problems for the future.
He added that as the Bank of England is currently predicting a base rate rise in the middle of next year, more homeowners may start to struggle; especially those still on a standard variable rate or tracker mortgage. “It might therefore be worth their while speaking to their existing lender or a mortgage broker about whether they could benefit from switching to a new mortgage now.”
ruth.gillbe@ft.com
