More than 2.3 million homeowners with fixed rate mortgages are risking increases in their monthly repayments of as much £207 a month if they don’t hunt down a more competitive deal, according to the firm.
It said borrowers whose deals still have several months to run can book fixed-rate deals now to avoid further rate rises. Many lenders leave the mortgage offer open for at least three months with some allowing you six months to decide whether to sign up.
According to MoneyExpert.com, average fixed rates in 2004 were 5.3 per cent and 5.18 per cent in 2005 but the average for three-year fixed rates is now 6.05 per cent. Around 2.3 million fixed-rate deals were taken out in 2004 and 2005 and around two-thirds are for two and three-year terms.
Anyone moving from a 5.3 per cent deal to 6.05 per cent will see their repayments rise by £68 a month on a £150,000 loan. However the real losers will be those who don’t source a deal but just accept the lender’s standard variable rate.
Currently standard variable rates are around 7.5 per cent and someone moving from 5.3 per cent to 7.5 per cent will see repayments rocket by £207 a month.
Sean Gardner, chief executive of MoneyExpert.com, said: “Anyone moving off a fixed rate they took out in 2004 or 2005 is likely to see some increase in their monthly repayments as rates have moved up.
“However there is a massive difference between the average fixed rates around now and lenders’ standard variable rates and anyone who fails to look for a new deal will feel the difference in their pocket.
“People forget that many lenders will leave an offer on the table for a few months, allowing you to make a considered decision. For example, in November last year there were over 80 fixed rate deals on the market at under 5 per cent – with some lenders keeping their offers open for up to six months, getting that quote last year and signing up now would look like a smart piece of business.
“There basically is no excuse for being on a standard variable rate mortgage and we’d urge everyone with them to at the very least have a look at what else is on offer.”
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