A think tank has warned that increasing interest rates could cause 14% of homeowners to see a decline in their disposable income.
According to the Institute for Fiscal Studies (IFS), 690,000 of those expected to be hardest hit will be under 40.
According to the organization, high borrowing costs "are unquestionably going to put many families in a serious bind.".
The Bank of England, which controls interest rates, is anticipated to increase them once more in an effort to combat inflation.
The inflation rate remained unchanged at 8 point 7 percent in the year to May, according to data released on Wednesday. This increased expectations that the Bank of England will increase interest rates by 0 point 25 percent to 4 point 75 percent.
The rising cost of something over time is referred to as inflation.
Considering that inflation is at "levels not seen in decades, rising interest rates are essentially inevitable," according to the IFS, a politically unaffiliated think tank with a focus on economics.
According to its economists, in anticipation of the Bank raising its base rate even further, many banks recently increased mortgage rates once again.
Therefore, if mortgage rates stayed at around 6%, mortgage holders would pay on average nearly £280 more each month compared to March 2022. People between the ages of 30 and 39, it claimed, would typically pay an additional £360.
Approximately 8.5 million adults, or 60% of those with mortgages, are expected to spend more than a fifth of their income on mortgage payments, according to the IFS.
This represents a significant increase. Only 36% of mortgagors in March 2022 were in this situation. It's also higher than in 2007-2008," it continued.
However, the think tank noted that a third of all adults aged 20 and over have a mortgage, and many of these people were on fixed rate deals, shielding them from rate increases. However, about a quarter of these deals are scheduled to expire by the end of this year, leaving people exposed to higher costs.
For some, the increase will be much greater: nearly 1 point 4 million people, 690,000 of whom are under 40, will see a decline in their disposable income of more than 20%, according to the IFS.
In an effort to slow the rate at which prices are rising, the Bank of England has been raising interest rates steadily since December 2021. Currently, 4 point 5 percent is the base rate used by lenders to determine interest rates for savings accounts as well as loans, mortgages, and credit cards.
Theoretically, as interest rates rise, borrowers will find it more expensive to borrow money and will have less available cash. As a result, households will make fewer purchases, which will slow the rate of price increases.
However, the rate of inflation has not been declining as quickly as anticipated, and calls for the Bank to raise interest rates have been heard.
In anticipation of another interest rate increase, lenders have been pulling deals and quickly raising rates in recent weeks.
The two-year fixed rate's average rate increased to 6 points, 15% on Wednesday.
Because it would "make inflation worse, not better," according to Chancellor Jeremy Hunt, the government will not be providing significant financial assistance to mortgage holders.
He did, however, promise to meet with lenders later to discuss what assistance they could offer to struggling families.
According to the IFS, low-income mortgage holders currently receive "relatively little support" from the UK's benefits system in comparison to what is available to low-income renters.
This entails that there is "not much of a safety net for those who are particularly likely to struggle with rate increases," according to the statement.
The think tank claimed that there were differences in where people lived in addition to different age groups being impacted by higher borrowing costs.
As an illustration, it claimed that average raises varied from just over £150 in Northern Ireland to £390 per month in the South East and £520 in London.
It was noted that renters had experienced "very large increases" in recent months, indicating that not only homeowners were feeling the strain.
The IFS stated that it is likely that at least a portion of the rent increases we are witnessing are a result of high interest rates increasing landlords' cost of borrowing.
According to data provided to the BBC, rent now typically consumes 283 percent of household income, up from an average of 27 percent over the previous ten years. Even a slight percentage increase can have a sizable impact on how much money people make.