A financial capability charity has warned that more than 1.75m mortgaged households have never experienced a rise in the Bank of England base rate, putting them at risk of a financial shock when rates increase.

According to The Money Charity’s analysis, there have been 1,762,400 first-time buyers since July 2007, the last time the Bank of England increased the base rate – more than four times the number of households in Birmingham.

These mortgagors will never have seen their repayments rise, as interest rates plummeted following the credit crunch. And more than 1.1m of these bought their first property since interest rates hit rock bottom in March 2009, meaning they’ve only ever experienced the very lowest rates.

Mortgagors on a variable rate have benefited from record low interest rates over the last five years. But as inflation has outstripped wage growth, for many this has been welcome respite rather than a chance to pay off more of their loan.

A rise could catch households by surprise, warns the charity – particularly as new mortgages are cheaper than ever. Figures from the Bank of England show that in January new mortgages attracted an average interest rate of just 2.81%, meaning a £150k mortgage would have monthly payments of £697. In September 2008 this was as high as 6.09%, meaning a repayment of £975.

Michelle Highman, chief executive of The Money Charity, said: “Recent low interest rates have been great for homeowners with variable rate mortgages and new buyers, but they won’t last forever.

“No one knows when interest rates will rise, but when they do mortgage rates won’t be far behind. The 1.75m households who’ve never experienced an interest rate rise could find themselves in for a nasty shock. And even those who’ve had mortgages for longer might have got used to their payments staying the same.”