Some 800,000 borrowers have either come to the end or are about to come to the end of their cheap fixed rate deals taken out two years ago.
Despite this, however, CML figures show that remortgage levels, as a proportion of total lending, continue to drop - falling in June for the sixth consecutive month.
Moreover, the figures remain considerably down on last year. Given the payment shock that many borrowers will be facing jumping from rates as low as 3.3% to around 6.5% - this apathy
is somewhat puzzling and could mean they are paying thousands of pounds more a year than they need to.
On a £100k repayment mortgage, for instance, borrowers who slip onto their lender's standard variable rate (SVR) - typical rate of 6.5% could be wasting up to £1,800 a year than if they remortgaged onto a market-leading tracker.
On a £200k repayment mortgage, they could be wasting over £3,500 a year.
During the Spring and Summer of 2003, two-year fixed rates were priced between 3 and 4%, in some cases lower than their discount and tracker counterparts.
Such low rates, combined with the added security triggered a flurry of borrowers to take them out. Now though, as these borrowers come off or near the end of their cheap fixed rate period they will find the economic climate, following five base rate rises very different.
All mortgage rates have risen dramatically. While the MPC did in fact cut base rate last week by a quarter of a per cent lenders' SVRs remain comparatively high, now typically around 6.5%.
For borrowers who had been enjoying interest rates of around 3.5% such a rate hike will undoubtedly come as a jolt. While a number of borrowers' cheap two-year fixed rates are not due to finish until August, there are still a great many borrowers who will already be feeling the pinch of their interest rates reverting to their lender's SVRs.
Given this then, one would expect remortgage levels to have risen considerably this year, to help cushion the impact. In contrast, however, remortgage levels have fallen back, currently standing at £10.4bn, down from the £11bn recorded during the same period last year, according to CML figures.
Duncan Pownall, mortgage development manager for Bradford & Bingley, commented: "Given the popularity of remortgaging over recent years and the fact many homeowners are increasingly rate aware, I would have expected remortgage levels to have been higher this year as hundreds of thousands of borrowers come to the end of their cheap fixed rates.
"Certainly up till now, however, this is just not proving to be the case and borrowers are losing out on thousands of pounds a year.
"Lenders are clearly desperate to try and keep hold of customers so are offering existing borrowers the same deals as new borrowers and imposing higher exit fees to dissuade them from switching. However, undoubtedly borrower apathy and unawareness remain crucial reasons why remortgaging is slowing.
It's vital, though, that people take steps now in order to avoid a potential leap in their mortgage costs. Rates are higher than
they were two years ago but this makes it even more essential for people to remortgage onto a competitive deal now and keep their repayments as low as possible. Hopefully the base rate cut last week will provoke people into action."
