The firm analysed more than 100,000 historic mortgage accounts as part of the study and calculated the level of mortgage accounts in arrears would jump from 1.85% to 2.12% following any rise in the base rate.
This would see an extra 30,000 customers falling into arrears of three months or more within a year of a base rate rise.
Damian Riley, director of business intelligence at HML, said: “Our analysis has shown the direct relationship between increasing a customer’s monthly payment and the likelihood of entering or further increasing arrears.
“We have seen that the average increase in arrears is broadly in-line with the increased payment resulting from mortgage account rate rises, indicating, as often is the case, that customers already on the edges of affordability will be pushed further towards the brink.”
Bank of England governor Mark Carney has publicly stated the central bank will not change the base rate until employment falls below 7%. HML expects this could be as little as a year away.
“Lenders need time to understand the impact of account interest rate increases on their customers’ affordability and to help those who are struggling with a further reduction in their disposable income,” Riley added.
“By the start of 2015, on current trends we would expect arrears to fall by another 10% (relative). Any such fall could be negated following a modestly increasing interest rate, meaning the overall state of arrears in the mortgage market in 2015 could return to something like today’s level.”
