Interest-only mortgage holders should switch while rates are low.

Remortgaging and moving from an interest only mortgage deal is advisable if you have low equity and no repayment vehicle in place to repay the capital owed.

The tightening of interest only mortgage criteria earlier in the year resulted in what the CML termed as 'mortgage prisoners'. These are home-owners with little or no equity and no means to repay the loan at the end of the term.

Currently it is estimated there are around 4 million home-owners on interest only deals in the UK. Those without a repayment vehicle are being warned unless they act now they could face a huge financial headache in the future.

There has been good news in the mortgage market of late. Both swaps and the Libor have fallen and the government has pledged £100 billion in cheap funding, which all means low funding costs for lenders.

Lower funding costs may filter through to mortgage-holder with increased mortgage availability, lower mortgage rates and the relaxation of mortgage lending criteria.

Some lenders such as Virgin, Abbey and Barclays have already cut their rates and others may soon follow suit.

Fixed rates are currently coming down the most and some lenders such as the Leeds BS and Skipton have released some longer term cheap rate offers.

There are cheap rate repayment mortgage deals on offer for those who want to switch from interest only mortgage but the advice is not to delay and act now.

The cheapest rates tend to be offered on a limited basis and become quickly over subscribed. By waiting you could miss out on a cheap rate offer.

Contact Deal Direct for a cheap rate repayment mortgage.