The standard fee for customers who switch or extend on an interest-only mortgage is £50.

James Hillon, head of mortgages at the Co-operative Bank, said: “We want to work with our customers to ensure that they are managing their finances and understand their needs and requirements at various stages of their life.

“We have started a regular communication programme with all of our interest-only customers to review their financial situation and ensure they fully understand their responsibility to repay their loan.”

Hillon highlighted that customers can close the gap between their outstanding mortgage balance and the current value of their home by switching to a repayment deal, overpaying or extending the term of their mortgage.