More than five million families could see their annual mortgage payments rise by an average of £5,100 between now and the end of 2024, heaping fresh pain on households already struggling with higher food and energy bills. The increase adds up to a £26bn mortgage rise for homeowners, according to the analysis by the Resolution Foundation thinktank which said nearly a fifth of British households would have to spend more on their housing costs by the end of 2024. The thinktank said that approximately £1,200 of that £5,100 figure was due to expectations that interest rates would rise more quickly than previously thought because of the upheaval in the financial markets caused by the government’s disastrous mini-budget. “Between now and the next election, Britain is on track for a £26bn mortgage hike,” said Lindsay Judge, the thinktank’s research director. Judge said that almost half of borrowers were on course to see their family budgets fall by at least 5% due to higher housing costs, which meant the “living standards pain from rising interest rates will be widespread”. “Households across Britain are currently living through an inflation-driven cost of living crisis as pay packets shrink and energy bills rise,” she said. “The government has responded with policies such as the welcome energy price guarantee. But the Bank of England is responding too by raising interest rates, which will benefit savers but cause a fresh living standards crunch for mortgaged households.” While interest rates started the year at 0.25% the Bank of England is expected to push them up to more than 5% by early next year. After years of ultra-low borrowing costs this new landscape has sent shockwaves through the housing market with experts predicting homeowners will struggle to make mortgage repayments, leading to rising repossessions in 2023 and an end to the UK’s 13-year housing market boom. Kwasi Kwarteng’s package of unfunded tax cuts led to chaos for homebuyers, with hundreds of fixed-rate deals withdrawn over the space of a few days, before lenders returned with significantly more expensive deals. After hovering around 2% for several years, mortgage rates have shot up. The average two-year fixed mortgage reached 6.47% on Friday, the highest since the financial crisis in 2008, while the average five-year deal was 6.29%, according to the data firm Moneyfacts. The Resolution Foundation said that while 1.2m households with variable rate mortgages would see their housing costs rise swiftly in line with the changes to the base rate, the impact on the 85% of homeowners on a fixed-rate deal would build over the coming years as they moved on to new deals. The thinktank said mortgage payments for 1.7m households would increase between now and the end of this year. A further 400,000 households would have to start paying more in early 2023. By the end of 2024, 5.1 million borrowers – close to one-fifth of all households in Britain – will be spending more on their housing costs, it said. Borrowers in London would be hit hardest, with average payments set to rise by £8,000 over this period, more than twice the level of the £3,400 increase in Wales. The impact in London is concentrated, however, as less than a fifth of households in the capital have a mortgage. Although higher-income households will face the biggest increases in mortgage costs in cash terms on average, the report said that it would be lower-income families with mortgages who faced the biggest increase as a share of their income.