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Homeowners to review cheap mortgages

Date: Thu, 09 Mar 2006

Homeowners could find their mortgage payments increasing unless they shop around for a cheap mortgage deal.

New research from MoneyExpert estimated that 970,000 fixed-rate borrowers could see their yearly mortgage bills increase by an average of £640 per year as they come to the end of their fixed-rate deals.

Figures show that the average fixed-rate mortgage taken out in 2004 had an interest rate of 5.3 per cent, however, the average interest rate has now fallen to 5.06 per cent – meaning that many homeowners could find a better deal by renegotiating to a cheap mortgage offer.

Sean Gardner, chief executive of MoneyExpert, said: "Homeowners need to keep their wits about them if they don't want to end up paying over the odds for their mortgages. The price of doing nothing can be steep."

He added: "Savvy homeowners can stay ahead of the game if they do a bit of homework and review the market."

Borrowers do not have to automatically switch to a variable rate and do still have the option of taking out another fixed cheap mortgage if they prefer the security of set monthly repayments.

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