Home owners could see their mortgage payments rise by £252 a year on average by the end of next year if interest rates start rising at a moderate pace, a report forecasts.

Research for Barclays Mortgages by the Centre for Economic and Business Research (Cebr) found that average mortgage payments across the UK could rise from their current monthly levels of £666 per month to £687 a month by December 2015. This would add on an extra £21 a month to payments, which would mean around £252 extra a year.

The Bank of England base rate, which has been kept at a historic 0.5% low for five years, has been helping to keep people’s mortgage payments relatively affordable, but signs that the economy is improving have prompted speculation about possible rises being on the horizon.

The Financial Flexibility report assumed that the “most likely” scenario is that interest rates will rise at a moderate pace, which for its model would involve the base rate rising to 0.75% in May 2015 and then 1% in August before edging up again to 1.25% in November next year.

With strong differences in house prices across the UK, the extra amount of money people would find themselves paying by December 2015 under the “moderate” model of interest rate increases varied, from an extra £32 a month in London to people living in Wales and the North West projected to be paying an extra £15 a month.

Across the income groups, high and middle income earners would see the percentage of their income that is taken up by their mortgage payments remain broadly constant, at 12% and 20% respectively if there is a moderate interest rise.

But those in the lowest fifth of the income groups could see an increase in the chunk of their income that went towards mortgage payments, from around 54% now to 55%.

Some experts have suggested that people who are worried about the impact of interest rate rises on their mortgages could consider locking into a longer-term fixed rate deal.

But others have suggested that with house prices strongly rising in some areas, some people may find that when a shorter-term deal comes to an end, the mount of equity they have in their home will have risen enough to push them into a higher deposit bracket, which could potentially give them access to a better range of deals and offset the impact of any gradual interest rate rises.

Andy Gray, Barclays’ managing director of mortgages said: “In working with the Cebr we have tried to model the realities that UK homeowners may face in the very near future.

“In the face of a rise in mortgage rates and in the cost of living, it is vital for homeowners to review their current situation.”