30,000 interest-only mortgage moves

UP to 30,000 homeowners have been forced to switch to interest-only payments on their mortgages because of financial difficulties.

In many cases, banks are encouraging customers to switch as it stops accounts falling into arrears and it keeps any struggling loans off their mortgage books.

However, while opting for interest-only payment appears attractive, brokers have warned it substantially increases the cost of the mortgage in the long run.