Taking out an interest-only mortgage comes with a degree of risk, it has been warned.

Interest-only products can be attractive to some buyers as they can help cut repayments by allowing people to pay back just the interest on the loan but some experts have expressed concern that this leaves many with a large amount of debt still outstanding.

David Higgins, director of Re – Financial Planning, an independent advisory firm, said: "Any client taking on an interest only mortgage is adding an extra dimension of risk over and above what they would normally have with a capital repayment mortgage.

"That risk may be that they''re hoping the value of their house increases year upon year, they eventually pay it off when they sell the house, which is a definite risk."

Mr Higgins suggested that those who have an interest-only mortgage should think about changing their arrangement to limit the risk.

"The ultimate advice is to switch it over to capital repayment – all of it or part of it," he advised.

However, the Council of Mortgage Lenders pointed out in August that the products could offer "financial breathing space" to first-time buyers, allowing them to set themselves up in their home.