11,000 homeowners are at risk of losing their properties after being trapped on interest-only mortgages they can not afford to repay

THOUSANDS of homeowners who took out interest-only mortgages are at risk of losing their homes because they can't afford to pay back the debt when they come to an end.

More than 80,000 interest-only mortgages will end in the next 12 months, but more than one in eight borrowers have no way of paying it back.

That means around 11,2000 borrowers face repossession of their homes by the banks, according to the Daily Mail.

Nearly one in five mortgage customers - around 1.67 million - have an interest-only mortgage, according to the Financial Conduct Authority.

Borrowers on these types of loans only pay the interest on their mortgage each month, meaning that the monthly payments are less but the amount they owe for the house stays the same.

So when you reach the end of an interest-only mortgage term – which is the deadline by which your loan must be repaid (normally between 25 and 30 years) – you will have to hand the property back to the bank unless you have another way of paying the lump sum.

Millions of homeowners took out the deals during the 1980s and 1990s after they were told that rising house prices would cover the overall debt.

The FCA has previously referred to the crisis facing these borrowers as a "ticking time bomb".

The problems are worst for borrowers who are approaching retirement and will not be allowed to remortgage due to their age and the fact their income will drop when they stop working.

Even though lenders have been writing to customers asking them to discuss their repayment options, then number of people who are actually sorting out their loans is low.

The finance watchdog, the FCA, urged customers earlier this year to contact their bank or lender to rearrange payment plans before their deals came to an end.

One elderly couple in their seventies are currently facing eviction after Santander has refused to extend their mortgage.

Len and Val Fitzgerald, who are 77 and 76, now face a £180,000 bill after their interest-only mortgage has come to an end, which they can't afford to pay.

In July last year, the Council of Mortgage Lenders (now the UK Finance) said that it believed one in 10 households did not have an appropriate strategy to repay the loan once it expires.

In 2013 the FCA called on banks to contact all borrowers with interest-only mortgages ending before 2020 about how they plan to repay. But only around 30 per cent of borrowers responded, according to the charity Citizen Advice.