The society has also scrapped fees associated with switching from an interest only mortgage.
Customers not acting and waiting until the end of their mortgage term will find themselves with a large loan that needs repaying immediately, or may face having their home repossessed. Warnings about setting up appropriate payment vehicles for interest only mortgages were previously incorporated into annual mortgage statements, but feedback from members showed that these were overlooked.
As part of a pilot, Britannia contacted 1000 interest only mortgage holders to ascertain whether they had a suitable repayment vehicle in place to repay their loans at the end of the term. Each mortgage holder was sent a bespoke letter containing tailored shortfall examples that made them aware of their debt and the repayment options available.
Rajeev Sharma, head of credit risk at Britannia Building Society, said: "As a responsible lender Britannia wanted to introduce a proactive approach to this industry wide issue. If customers want to address shortfalls by changing their mortgage type to a repayment mortgage, or repay early using a lump sum, then Britannia will waive all associated charges and fees to encourage them to do so.
"While a welcome 53 per cent of customers mailed in the pilot responded to confirm that they expected to be able to repay the mortgage at the end of the term, a significant number of account holders have not been in touch. We hope by championing the cause through the media and improving our customer contact programme, the remainder will get in touch and take timely action."
