A shocking seven million homeowners worry they will struggle to meet their mortgage repayments if interest rates rise by just 1%, according to research on behalf of mortgage and loans provider Ocean Finance.

The National Institute of Economic and Social Research is predicting interest rates will begin to climb from their historic low of 0.5% from as early as the first quarter of 2016. However yesterday’s decision by the Bank Of England to hold rates has led other experts to suggest a rise may not now come until 2017.

A 1% hike in interest rates would see borrowers with standard variable rate mortgages pay an additional £55 a month for every £100,000 owed.

According to the study 63% of borrowers reckon they would have to cut back on all non-essential spending, such as weekends away or meals out, to cover the additional cost. And while many think they could absorb the extra cost by cutting back in other areas, 12% are worried they will get into financial difficulty just trying to make ends meet.

Nearly a quarter of borrowers surveyed have already switched to a fixed-rate mortgage and a further 16% plan to lock into a fix to protect themselves against a rate increase. However, more than a third of homeowners are not taking any steps to ensure they are shielded from future rate rises.

The pressure to meet increased mortgage payments could even force 10% of homeowners to consider selling their home to avoid the higher cost of their mortgage.

Gareth Shilton, Ocean’s spokesperson, says: “It’s inevitable that interest rates will rise at some point. Whilst the rate rise is likely to be gradual, every rate hike will have an impact on hard-working families who are already struggling to make ends meet.

“It’s important to understand that in most cases there are options, so it’s important that anyone who is concerned about a rate increase should seek advice on the best deal available to them.”