Homeowners could face £3,000 a year increase in mortgage payments

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Housing stock

While George Osborne claims his policies are delivering economic security for the country, the Resolution Foundation begs to differ - at least, if your family is one of 2 million homeowners.

The Foundation claims many of these families will have to find £3,000 a year in extra mortgage cash if interest rates rise much above pre-crunch levels. How exposed are you?

Interest-only anxiety

Clearly that's dependent on how big your mortgage is, not to mention credit card or personal loan debt you may have picked up.

Those with a tracker interest-only 25-year deal would be at most risk: a one per cent hike on a £225,000 mortgage at 2.5% would push monthly payments from £468.75 to £656.25. Almost a £200 monthly increase.

Currently it's estimated some 2.6 million homeowners are on interest-only deals. Let's say you've a 2.5% interest-only £200,00 mortgage over 20 years and want the longer-term security of a repayment arrangement. Currently you'll be paying around £416 a month.

But if Bank of England rates rise by just 0.5% and you make the leap to a repayment deal, your monthly payments would soar from a little over £400 to £1,120. £620 extra to find. On an annual basis, that rises to £7,440.

See the latest mortgage rates and get expert advice

Higher and higher

"Even if we take a somewhat rosy view of how the economy will develop over the next few years," says Matthew Whittaker, senior Resolution economist, "the number of households severely exposed to debt looks as though it will double."

He goes on: "But the levels of debt built up by families in the pre-crisis years are such that even relatively modest changes in incomes and borrowing cost assumptions produce significantly worse outcomes."

Resolution thinks up to two million British families could be spending more than half their disposable income on repayments by 2018. For some time there has been expectation that rates will start to climb from 2015.

But recent sharp falls in unemployment means the seven per cent threshold at which the Bank of England may hike rates now looms closer.

What about savers?

A rate rise will be sorely welcomed by UK savers though. Savings rates remain miserable. An example from the Halifax: their Halifax Online Saver account gives just 0.72% interest after tax. Scandalously poor. Halifax even claims this rate is a 'bonus' special.

However if you're prepared to lock your cash for up to five years, then First Save is offering 3.25%, though it's an online deal only and a minimum of £1,000 deposit.

Looking for somewhere to stash your money? Check the latest savings rates