A mortgage time bomb? You can hear it ticking already But it sounds to me like another horse that has already bolted. Problems have been stored up and will eventually come out in the wash, review or no review. His plan is all very creditable but we can't escape the fact that there is trouble brewing and the review will be of little help to those borrowers who already have interest-only mortgages (and there are a fair few of them, too). As part of the review, the regulator discovered that 30pc of new mortgages taken out between 2007 and the first quarter of 2010 were interest-only. There were also hundreds of thousands of people who took out interest-only loans many years ago backed by what was deemed at the time to be a credible repayment strategy - an endowment policy. It is well documented that endowments have failed to deliver anywhere near the returns needed to repay mortgages. Many customers have received compensation for being mis-sold the endowments and many would have been advised to use their windfall to reduce the mortgage and switch to a repayment plan to ensure that the loan got paid off at the end of its term. Yet there is a belief that many home owners did no such thing - that they stayed on interest-only and blew the compensation money. These people face significant shortfalls when their mortgage expires and could face having to sell their home to repay the balance. Interest-only borrowers face a tricky situation. Lenders have been forced to move the goalposts. While they would have been more than happy to turn a blind eye to repayment vehicles a few years ago, today they won't entertain an interest-only mortgage without their backs fully covered. Indeed, last year 96pc of all new loans to first-time buyers were on a repayment basis - the highest-ever proportion and a significant contrast to the peak of the interest-only market in 1988 when only 12pc of first-time buyers took out a repayment mortgage. Only this week, RBS and NatWest changed their criteria - now anyone earning less than £50,000 a year and lacking a deposit of 25pc can kiss goodbye to any idea of an interest-only home loan. Mr Wheatley reckons that up to 1.5 million home owners in their 50s with interest-only mortgages won't be able to pay off their loans. It is a frightening thought. The Council of Mortgage Lenders has been quick to pour cold water on any suggestions that Britain is sitting on a mortgage time bomb - it is also quick to defend its members, who are "implementing useful steps" to help those at risk. It says its data shows that most interest-only mortgages will have a comfortable equity cushion by the time they mature and that talk of a time bomb is overstated. According to its analysis, there are around 3.9 million outstanding interest-only mortgages. Of these, two thirds are set to mature after 2020. In the meantime, the number of interest-only mortgages set to mature each year is between 131,000 and 158,000. But the CML admits it has no way of knowing how many of the 3.9 million have credible repayments plans in place. One of the saving graces of the financial crisis and its aftermath has been super-low interest rates and a pretty stable housing market. In fact borrowers have largely escaped and repossessions numbers in 2011 were at their lowest since the financial crisis began in 2008. Yes, house prices have fluctuated but according to Nationwide the value of my home is just about as it was when I moved in three-and-a-half years ago. With luck (apologies to all the savers out there), the current environment will continue for a while yet. But it won't hide the problem that there are hundreds of thousands of borrowers who have interest-only mortgages, whose house has failed to appreciate significantly in value and who cannot afford to increase their monthly mortgage bills by switching from interest-only to a repayment basis. The increase in cost is significant. An interest-only mortgage of 5pc on a loan of £150,000 will cost £625 a month; switch to a repayment mortgage over say 20 years and the repayments shoot up to £1,003. Many households will not be able to move home or remortgage - or have any way of repaying the capital, whether in five years' time or 20. Picture Caption: Hundreds of thousands of people took out interest-only loans backed by what was deemed to be a credible repayment strategy - endowment policies. But they have failed to deliver anywhere near the returns needed to repay mortgages