The Co-operative said the communications campaign would be going above and beyond recommendations outlined in the Mortgage Market Review.
The latest MMR consultation paper indicated lenders should communicate with interest-only customers once during the lifetime of their mortgage.
Figures from the Council of Mortgage Lenders show that, by 2007, 33% of mortgage being taken out were interest only.
Figures from the Financial Services Authority show that an estimated £120bn of interest-only mortgage loans were due for repayment over the next 10 years.
The Co-operative is waiving all fees for customers who extend their mortgage term or switch to repayment.
James Hilon, head of mortgages at The Co-operative Bank, said: “Wherever possible we look to invest in initiatives that help our customers to manage their finances more effectively.
“By launching a regular communications programme and removing the fee for interest-only mortgage customers who switch to repayment or extend their term we want to encourage those who are worried about repaying their loan to take action.”
