A new report on debt by Goodbody Stockbrokers claims Irish households are now more sensitive to interest rate changes than at any other time in Irish economic history.
The report says the level of household debt in 2004 - as a proportion of disposable income - stood at 120 per cent, compared to 50 per cent 10 years ago.
It predicted that debt levels would "further deteriorate" to 160 per cent of disposable income within three years.
The report said: "The accumulation of debt puts Irish households in a more vulnerable position should a shock come about in terms of employment or interest rates."
It blamed "the unprecedented boom" in the housing market over the last decade for the surge in debt.
Mortgage debt now accounts for 82 per cent of total household debt but affordability is being maintained by "sustained declines in interest rates and a decreased tax burden", it said.
The report questioned the notion that Irish consumer spending was being maintained by an ever-rising debt spiral fuelled by sustained low interest rates.
Instead it said savings ratios were one of the highest in the developed world and had in fact risen over the past three years.
Nevertheless it revealed Ireland had moved rapidly up the international household debt league table to 12th place in a sample of 19 countries - behind the UK which has a level of 155 per cent and the US which has a level of 124 per cent.