Halifax has warned that around 135,000 fixed rate mortgages taken out in late 2020 at low rates are due to mature this year.
Borrowers coming to the end of these 5-year deals could see their rates jump from under 2.4% to an average of 6.9% if they move onto their lender’s standard variable rate.
This would push repayments on a typical £210,000 loan from £932 to £1,361 a month, an increase of £429.
For interest only loans, monthly payments could rise by £788.
Halifax said that remortgaging onto a new fixed rate could save borrowers over £700 a month.
A 5-year fixed rate at 4.24% would mean monthly repayments of £1,095 instead of £1,361, a saving of £266.
Interest only customers would pay £773, over £430 less than the average standard variable rate.
Andrew Asaam, mortgage director at Halifax, said: “While interest rates are higher than they were five years ago, for people coming to the end of their current fixed rate, taking early action can help minimise the jump in monthly payments they may be expecting.
“It’s never been easier for people to switch lenders to get a better deal. As well as a range of competitive remortgage products to help borrowers soften the effects of today’s higher rates.
“Acting now gives you the certainty of knowing you won’t see a bigger rise in your monthly payments than necessary, while still giving you the flexibility to choose another deal if rates continue to drop in the meantime.”
