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15 March 2006
Homeowners with fixed-rate mortgages should review their loans or risk overpaying, claims financial comparison website Moneyexpert.com.
According to research by the company, more than 970,000 homeowners who took out fixed-rate mortgages two years ago are risking a rise of £948 a year in repayments.
Fixed-rate mortgages in 2004 had annual percentage rates (APR's) of around 5.3 per cent, but these have now dropped to around 5.06 per cent, says the company.
Consumers with two-year mortgage deals can save money by re-negotiating with their current lender or moving to another deal, or they risk being put on their lenders' standard variable rate, which averages 6.24 per cent APR, according to the research
"Homeowners need to keep their wits about them if they don't want to end up paying over the odds for their mortgages," advised Sean Gardner of Moneyexpert.com.
"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," he added.
The data revealed that a homeowner paying 5.3 per cent APR on a £136,500 mortgage would face estimated monthly payments of £831, but if they moved to a 6.24 per cent rate their payments would increase to £910 a month, an extra £948 per year.
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