Even modest rises in the near future will force up to eighty thousand mortgage holders to tighten their belts, a new economic report indicates.

And some cash strapped borrowers are adding to their financial woes with extra unsecured loans and undisciplined credit card use.

"It might be time to think about cutting up the credit card, " says Frank Conway, marketing director with the Irish Mortgage Corporation.

"It might even be time to get rid of the car. And if the worse comes to the worst, don't dismiss the option of selling up and opting for a cheaper, more affordable home."

After a sustained period of historically low interest rates, too many borrowers are unaware of the potential for hardship further significant hikes could cause. "Like an athlete in his prime who thinks he'll always go on winning, there are huge numbers of young people out there who don't understand the implications of recessionary times, " Conway warns.

"Let's call them economically inexperienced . . . the young people who don't appreciate that market conditions do change. Wages aren't always guaranteed to rise. Your employment status may alter. The good times can be likened to sunny weather . . . you don't appreciate it until it's gone."

The growing trend in 100% mortgages is lulling some borrowers into a false sense of financial security, Conway believes. "There are people who think that a 100% mortgage covers everything . . . lock, stock and barrel. They don't factor in extra costs like possible stamp duty, conveyancing fees and furnishings.

Some of them end up using a credit card to fund furnishings which then knocks their budget out even further.

"Our advice is to keep saving. You need to sit down on a yearly basis and do a review of what you're spending. The industry standard on debt service ration is around 35% of gross income. If you're paying out more than that on your combined bills, then you're getting a little bit tight."

A consolidation loan is one option for borrowers who already are in trouble, Conway maintains. "Some financial experts say it's not the right thing to do, but if you're looking at financial fitness . . . it is the right thing to do."

Anti-inflationary rhetoric emanating from the European Central Bank could signal three more quarter-point rises before next Christmas some analysts now say . . . a faster rate rise than even the most pessimistic financial forecasters had previously predicted.

Meanwhile, a new IIB/ESRI study has found that two out of three Irish borrowers feel their debts are now putting a burden on their household finances.

The number of borrowers who feel that their debt represents a 'heavy burden' has increased notably in the past year, the study claims. And one in six mortgage borrowers and one in five of those with other personal borrowings say their current debt level is a significant concern.

Financial stresses are greatest for those with relatively modest incomes but because of higher borrowings, some of those earning up to 80,000 also have significant concerns.

A rising trend in interest rates will hurt Irish borrowers further, the report claims.

Roughly 40% of borrowers reckon their financial position would deteriorate substantially if interest rates rose by 1%. As many as 80,000 borrowers would be hit by another half per cent rise in interest rates. Of these, some 50,000 borrowers who are already expressing significant concerns about both household and non-household debt will feel a considerable pinch.

According to Austin Hughes of IIB, there has been a clear deterioration in the situation of low income borrowers as interest rates have started to increase. "In addition, many of those in their forties also face difficulties because while they are asset rich, many are also cash poor at present."