More than two million people with endowment mortgages are facing a shortfall, the Financial Services Authority (FSA) has said.
More than two million homeowners are facing endowment shortfalls
The average endowment shortfall per household is £7,200, the FSA added.
The Association of British Insurers (ABI), however, pointed out that the average shortfall per policy had in fact fallen since 2002.
Nearly 70% of those facing a shortfall have remortgaged, sought financial advice or applied for compensation.
"The efforts of the industry and others appear to be paying off," said Chris Kenny of the ABI.
"Many more people have taken action to address the possibility of a shortfall."
However, the FSA said that about 700,000 people had still done nothing about their endowment shortfall.
Endowment mortgages were sold heavily in the 1980s.
Many people were told their endowments were guaranteed to pay off their mortgages but these promises have frequently fallen well short.
Increasingly, consumers have been seeking compensation for mis-selling from endowment mortgage providers.
Last month the Financial Ombudsman Service - which adjudicates on endowment mis-selling - revealed that it was receiving 1,300 complaints a week about endowment mortgages, 34% more than a year ago, and up from 300 a week three years ago.