Borrowers could save over £5,000 on their mortgage payments by switching to a new fixed rate two-year offer, according to new analysis by Experian and L&C Mortgages.

The findings suggested that a homeowner with a £150,000 20-year mortgage loan on a lender’s standard variable rate (SVR) of 4.49% would have a monthly repayment of £948.16.

However, the same mortgage on a two-year fixed rate remortgage deal of 0.99% would have a monthly repayment of £689.17, representing a saving of £6,215.76, or £258.99 per month.

Taking the arrangement fee of £999 into account, this would still leave a homeowner better off by £5,216.76 over the two-year period.

Data from Experian also suggested that almost 6% of homeowners could be coming to the end of their fixed term deal over the next three months so will need to remortgage.

Experian head of consumer affairs, James Jones, commented: “There can be substantial savings to be had by switching to a new fixed rate mortgage deal, so we urge anyone with a fix ending soon to check out their options. Taking no action will mean you lapse onto your lender’s standard rate, which will usually lead to a hike in your monthly payments.

“You can get help exploring your options by seeking advice from a free, independent mortgage broker. It’s also worth taking a moment to review your credit score, giving you the opportunity to make improvements where appropriate.”

L&C Mortgages associate director, communications, David Hollingworth, added: “With living costs on the rise it’s important consumers are aware they can shop around and find a better deal, as they could be saving hundreds of pounds a month by switching to a fixed rate mortgage.

“There remain competitive deals on the market, but if expectation of an interest rate rise persists then the deals currently available might not be around for too much longer.”

Share Story: