A fixed-rate mortgage time-bomb is set to go off and thousands of homeowners could see their fixed-rate mortgage payments double overnight, warns a property consultancy.

How would you like it if your monthly fixed-rate mortgage payments were suddenly to jump from £700 to £1400 overnight? That is the very nasty shock that could be in store for thousands of homeowners – thanks to a hidden elephant trap in the conditions on which their mortgages were granted, according to property consultancy In2perspective.

At risk are those who have in recent years taken on fixed-rate or discounted mortgage deals – the only way millions have been able to afford properties as prices have soared.

With interest rates at record lows of 3.5% as recently as last November these homeowners are still benefiting from interest rates considerably lower than today’s 4.75%.

Financial advisers have reassured homeowners taking out these low rates that they will be able to refinance at the end of the term, typically 2 to 5 years (which of course gives the financial advisers a double dip into the commission trough).

The trouble is, if house values go down – as many now predict they will - thousands of homeowners will find they no longer have sufficient equity to meet lender’s requirements.

This is where they will fall into the trap – because they will discover that they can only hold onto their homes and mortgages by paying at the standard variable rate (SVR). And the table below shows just what a devastating effect this can have on monthly payments for a £250,000 mortgage.

Particularly at risk are owners of:

• Properties with 80-100% Loan to Value mortgages
• New Build Properties
• Buy-to-let investors who have refinanced to expand their portfolio
• Self-certification borrowers who's payments are already stretched
• Properties bought since 2001
• Properties in Central London
• Docklands and other areas of mass new development