Nearly one million homeowners could face having their homes repossessed because they do not have a plan to pay off the money they owe, CItizens Advice has warned.

Research by the charity found that 934,000 people had not made arrangements to pay off the debt on their interest-only mortgages at the end of the mortgage term.

The new figure is much higher than city watchdog - the Financial Conduct Authority (FCA) - previously estimated which said around 260, 000 homeowners did not have a strategy to pay their loans back.

If homeowners cannot find the funds to pay the money back they may have to sell their homes - or even face having them repossessed.

An interest-only mortgage gives the borrower lower monthly payments on their home loan as they only pay the interest each month.

However it means that the amount owed to the lender at the end of the mortgage term remains the same, as the homeowner is not actually paying back any debt.

The new figure is much higher than the FCA previously estimated. Credit: PA

Millions took advantage of these mortgages before rules were tightened up in 2013.

Citizens Advice chief executive Gillian Guy said that it was a positive step that rules around interest-only mortgages had changed, but that many people had been forced into a "financial black hole".

Lenders have to exhaust all other options when borrowers get into arrears. 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.

Gillian Guy, Citizens Advice

Some 3.3 million people in the UK currently have interest-only mortgages.

Citizens Advice is calling for lenders to do more preventative work to help customers prepare for the end of their mortgage.