One consequence of the credit crises could be a move among borrowers back to interest only loans in an attempt to cut monthly mortgage costs. 

The Financial Services Authority calculates that 1.4 million borrowers will have to re-mortgage when their current fixed rate mortgage deals come to an end this year.  Simply transferring to a higher rate loan could add as much as 40 per cent to monthly mortgage costs. 

Moving from a repayment mortgage to an interest only loan, however, could cut as much as £225 a month off the interest payments on a £150,000 mortgage, helping to offset the impact of a higher interest rate.  Francis Ghiloni, marketing and business development director at mform.co.uk, says: "Moving to interest-only repayments on your mortgage will help reduce your monthly costs"