Many homeowners in the UK are "on the rack" as growing financial pressures stretch them to the limit, a charity has warned.

According to the Consumer Credit Counselling Service (CCCS), higher inflation and interest rates will leave the majority of homeowners at "breaking point".

Figures from the CCCS show that homeowners are facing twice the average rate of inflation.

Annual repayments on a £150,000 mortgage will have risen by about £500 as a result of three interest rate rises since August 2006.

Last week, the Bank of England’s Monetary Policy Committee (MPC) decided to leave its key interest rate on hold at 5.25 per cent.

However, financial analysts said a quarter point increase remains highly likely in the next couple of months.

Malcolm Hurlston, CCCS: "Homeowners are being stretched…they are on the rack."

The current rate of 5.25 per cent is the highest level in more than 5 years.

The CCCS said homeowners hold double the unsecured debt of people who rent.

According to the Bank of England, the proportion of mortgagors nationwide who also have unsecured debt has increased by a third in the last ten years.

And with interest rates uncertain, the FSA has urged consumers to consider how they would manage their existing debt if economic circumstances changed.

Mervyn King, chairman of the MPC, has encouraged both borrowers and lenders to "think carefully" before committing to extra debt.

CCCS chairman Malcolm Hurlston said: "Homeowners are being stretched…they are on the rack.

"As the burdens on household finances mount, our research shows that homeowners in particular should take care."

The article UK homeowners 'on the rack' originally appeared on 999 Today