According to new research, dropping home prices have left hundreds of interest-only mortgage payers facing a massive capital repayment fee at the end of their term.

Mortgage holders paying their mortgages on an interest-only package have been urged to consider switching to repayment, according to a new survey by a financial firm.

Around 23% of mortgage-holders have an interest-only mortgage, and if they do not have a mortgage repayment plan, insurers have said that property owners could be wasting money in the long-term.

It is thought that interest-only mortgage holders who have a well-monitored investment scheme in place will not be at risk.

However, mortgage holders who have failed to build up a sum to repay their capital at the end of the term may find themselves struggling, and therefore in debt.

Hannah Skenfield, mortgage channel manager at the economic company, said: "If you are currently locked into an interest-only deal, the fee for switching to capital repayments with the existing lender is usually only about £25, and so in most cases you should take action immediately."