First-time buyers who have taken out a 100 per cent mortgage recently could be pushed into negative equity if house prices dip, according to the Motley Fool.

According to the finance site, a drop in house prices may result in buyers in such financial circumstances being unable to sell as the amount they owe on their mortgage will be greater than the value of their property.

David Kuo, head of personal finance at the Motley Fool, stated that borrowers on 100 per cent mortgages should be aware that "stagnant house prices" may result in them being partnered with their lender and "prisoners in their own home" until house prices rise again.

"However, they can tip the scale in their favour by ensuring that they choose repayment mortgages rather than the cheaper interest-only options. They should also overpay their mortgage as often as they can afford," he added.

Mr Kuo asserted that in overpaying, consumers are "chipping away" at their debt.

Earlier this month the Motley Fool stated that it was "not surprised" at the Bank of England's decision to maintain interest rates at their present level of 5.75 per cent.