Government forecasts buried in the Autumn Statement suggest the average mortgage could cost an extra £5,000 a year by 2018, gold traders have warned.
The "rather large bombshell dropped into the statement" showed the government expects three-month Libor to hit 3.1% by 2018, up from around 0.5% today.
The last time short-term interest rates were around 3.1% was in early 2008, when the average variable mortgage rate was 7.5%, according to website Goldmadesimplenews.com, aimed at gold traders.
This means mortgage rates could rise by as much as 5% by 2018, it said.
"Assuming the government is correct with its three-month Libor rate prediction, then we can expect to see mortgage rates around the 7% to 7.5% range in 2018."
The statement also included a line stating that each 1% rise in mortgage rates will cost the average homeowner an extra £1,000 a year.
"This means that by 2018 average mortgage costs in the UK will increase by around £5,000 a year."
If the government's figures are accurate, they could choke off the housing market and wider economic recovery, the article said.
"There are around 11.2 million households with mortgages in the UK according to the ONS – which means that in total, they will have to find a staggering £56 billion, or 3.2% of 2018 nominal GDP, in just five short years.
"And given that households are eating into the long-term savings at the fastest rate since the 1970s, just where in the world is this extra £56 billion expected to come from?"
It accused the government and Bank of England of blowing a massive housing bubble and "setting the unwitting homeowner for an almighty fall in the not too distant future".
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