3 million homeowners would struggle if interest rates rose by 1%

According to research by MarketGuard, almost three million people would struggle to make payments towards their mortgage debts if interest rates were increased by just 1%, The Telegraph reports.

The news comes amid speculation that the Bank of England (BoE) will push the base rate up this year from the 0.5% it has been held at for two years.

Many homeowners have been able to enjoy low interest rates in recent years, but experts have warned that a rise in interest rates would lead to `major problems` - with millions of homeowners struggling `to keep the roof over their heads`.

The group`s survey also suggested that 900,000 would find it difficult to contribute just £50 extra a month towards their secured debt payments. This figure increases to 4.8 million if mortgage payments were to increase by £200 a month.

Chief executive of MarketGuard, Chris Taylor, said: "It is a worrying prospect for many households and reveals just how vulnerable the British public is right now to a rise in interest rates. It is clear that we face a major problem if rates start to move dramatically upwards in response to inflationary pressure."

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