Mortgage bill '˜would go up £10bn with a 1% rate rise'

The increase would equate to adding £930 a year to the cost of servicing the average mortgage.

Borrowers on variable rate deals influenced by movements in the Bank of England base rate would be the first to feel the pain, putting the annual mortgage bill up by £4.3 billion immediately, Savills said.

The six in 10 (59%) of borrowers on fixed-rate deals would feel the impact later, when their existing mortgage deals come to an end.

Of the total increase, Savills calculates that buy-to-let landlords would pay an additional £2.4bn, with other home owners paying £7.8bn more.

“This would bring an end to the historically low mortgage costs that have boosted housing affordability and limit the buying power of those needing a mortgage, and underscores our forecasts for more subdued house price growth over the next five years,” said Lucian Cook, head of residential research at Savills.

Savills forecasts that average UK house price growth will stand at 14% in total over the next five years.

Borrowers are bracing themselves for further possible interest hikes following the increase last year from 0.25% to 0.5%.

Earlier this month, Bank of England boss Mark Carney braced borrowers for further and faster rate hikes, although he also stressed rises would be limited and gradual.

With the possibility of further base rate rises on the horizon, home owners looking to lock into a long-term deal to get some certainty over their repayments may also find the rates on offer have edged up.