Unbiased.co.uk believes this is potentially a ticking time bomb.
Karen Barrett, chief executive at unbiased.co.uk, said: "With incomes squeezed, it's not surprising that many people are trying to save money by sticking to interest only mortgages, but this is a potential ticking time bomb.”
Of the 1.6m almost a third of this group (32%) are either in or coming up to retirement age (55+) while more than half are between the ages of 35 and 55 (53%).
Barrett said: “Many will be forced to downsize or continue to pay large mortgages well into retirement, when income is tighter than ever. The goal of becoming ‘mortgage free' is becoming ever more elusive for some."
She pointed out that with lenders now clamping down on interest only mortgages, and slashing loan-to-value requirements to around 50% - 60%, many people currently on interest only deals could easily find that no similar options will be available to them when they come to remortgage in the future.
"To avoid any kind of payment shock when you remortgage and to ensure you have paid a considerable chunk of your mortgage off before you retire, it is vital to see a whole of market mortgage adviser.”
