More than a quarter (25.7%) of mortgage payers will be at risk of default by the end of this year, said Hargreaves Lansdown – a figure that’s up by 425,000 in the last 18 months.

In its latest Savings & Resilience Barometer, the investment platform said that remortgaging in 2023 will swallow an extra 3.1% of average income after tax.

The report, put together with Oxford Economics, compares this increase in outgoings to the equivalent of an 80% hike in energy bills.

For 347,000 mortgage payers the situation is even more dire, because they are deemed to be at ‘critical risk’ of defaulting, as they don’t have the financial resilience to cope with this rise.

These borrowers are already spending more cash each month than they have coming in and don’t have emergency savings to ease the remortgaging hit, said Hargreaves Lansdown.

It added that singletons, younger people, Londoners and the self-employed will be particularly at risk this year.

Sarah Coles, head of personal finance at Hargreaves Lansdown: “This year we face a remortgage lottery. The losers are those whose fixed deals run out by the end of the year, who’ll take a hit that’s equivalent to an 80% hike in their energy bills.

“Our modelling shows that two million households will be at risk of falling into arrears, but because the cost-of-living crisis has taken a massive toll on financial resilience – from savings to how much cash we have left over at the end of the month – almost a million people will be wrestling with even worse problems.

“It’s horribly unfair, because those who remortgage this year face significantly higher rates. Right now the average five-year fixed rate has fallen to 5% and the average two-year fixed rate isn’t much higher (according to Moneyfacts), but this is a far cry from back when these people last remortgaged, when rates were fixed closer to 2%.”