Borrowers coming to the end of a two-year fixed rate this month face a large hike in their mortgage costs if they don’t remortgage, according to figures from Moneyfacts.

The financial information provider said that the average two-year fixed rate taken two years ago was 2.87%. As these deals come to an end, borrowers will automatically revert to an average standard variable rate (SVR) of 4.59% if they do nothing – a huge increase of 1.72 percentage points.

Savvy borrowers

Luckily, it also revealed that switched on borrowers were more likely to remortgage today than at any point since 2008, potentially saving themselves over £2,000 a year.

Charlotte Nelson, finance expert at Moneyfacts, said: “The motivation to remortgage has been edging up in recent months, with the average SVR standing at 4.59% today, which means that those coming off a cheap two-year fixed rate could potentially see a difference of 1.72% on average. This is a marked increase particularly when compared to the average two-year variable rate tracker, which stands at 1.88%.
 
“With the average two-year fixed rate standing at 2.30%, borrowers will find they could be £184 a month or £2,208 a year better off if they switch from the average SVR to the average two-year fixed rate mortgage.

“This huge savings potential is what is driving many to remortgage away from their SVR and on to a new deal.”