It is estimated that some 934,000 people have interest only mortgages and do not have a plan on how to pay it off when their term ends, according to the research by consumer charity Citizens Advice.
Time is running out for some people who will either have to sell their homes, find the capital to pay off the debt or could risk having the property repossessed, the Yougov poll found.
Some of the people who came to the consumer champion said they were not made aware that they would need to repay the capital at the end of their term. The average shortfall was previously estimated to be £71,000.
Overall there are around 3.3 million mortgage holders who have interest only products of which 1.7 million have no linked repayment vehicle, such as an endowment or ISA and 934,000 of these have no plan for repayment and 432,727 of these people have not even thought about how they will repay the capital.
Rules were tightened in 2012 to ensure interest only mortgages were no longer available without a repayment plan, which has resulted in a major drop in the number of products sold. Citizens Advice supports this change, but says people who already hold these mortgages need more support.
The charity is concerned that interest only mortgage holders do not have the same protections when their term ends than when mortgage holders fall into arrears. A protocol was launched three years ago which gives lenders a legal obligation to consider alternative options before starting possession action, including extending the length of a mortgage, changing the type of mortgage and giving people reasonable time to sell their property if necessary.
But these protections do not apply to interest only mortgages at the end of the term which is at the very point when many customers discover they are in trouble.
'People buy a home for stability but interest only mortgages have forced many into a financial black hole. It is good rules around these mortgages have changed, but there are many people who previously took out these products and face losing their home,' said Gillian Guy, chief executive of Citizens Advice.
'Lenders have to exhaust all other options when borrowers get into arrears and it’s time to level the playing field so that interest only customers get the same protections when their mortgages mature. It is also important that people can get independent advice, guidance and support about how they can plan and manage their finances,' she added.
The Financial Conduct Authority (FCA) has said that due to previous peaks in the sale of interest only mortgages, they expect there to be waves of potential repossessions from 2017 to 2018, from 2027 to 2028 and in 2032.
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% of borrowers responded.
Citizens Advice says lenders should have to do more preventative work to help customers prepare for the end of their mortgage. It urges companies to phone customers or offer of a face to face meeting.
The charity also recommends that lenders should have to follow steps before taking an interest only borrower to court, including a requirement to discuss a range of repayment options, a requirement to discuss moving to an alternative mortgage product, including extending the duration of the mortgage and enough time to sell their home for market price if necessary.