Borrowers coming to the end of their two-year fixed rate mortgages are being advised to take advantage of a drop in annual percentage rates (APRs) and remortgage.
The average APR on a fixed-rate repayment mortgage is currently 5.06 per cent, which means consumers would pay around £811 a month for a £136,500 mortgage.
This compares with the £831 a month homeowners would have paid two years ago on the same loan, according to MoneyExpert.
Moreover, if people do nothing before the end of their fixed-rate period they will automatically be switched to the lender's standard variable rate (SVR), the average of which now stands at 6.24 per cent.
If they remain with their current lender at the same rate they will therefore pay around £910 a month, which works out at an extra £948 a year.
Fixed-rate deals have become more popular since last August, when lenders dropped their rates in response to the Bank of England's quarter point reduction in the base rate.
Sean Gardner, chief executive at MoneyExpert, explained: "Interest rates have moved since 2004 and the mortgage market is different from two years ago.
"What was a great deal then is not quite as good now.
"Savvy homeowners can stay ahead of the game if they do a bit of homework and review the market." To read more about remortgaging, click here.
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