The average homeowner who fails to take out a new fixed or reduced rate mortgage when their current mortgage term expires, could end up paying hundreds more a month according to mortgage adviser, Alexander Hall.

The data revealed that if the average homeowner took out a loan of £217,502 two years ago, with a 15% deposit on the average house price of £255,885, they would have been making a monthly repayment of £1,269. The average mortgage rate was a two-year fixed term at an 85% LTV sitting at 4.98%.

At the end of their two-year fixed term, they would have a remaining loan of £208,277, the average mortgage rate having reduced to 4.74%, this would see them lock in a new full monthly repayment of £1,241 - a saving of £28.33 per month, or £679.92 over the full two-year fixed term. 

However, for those who fail to negotiate their mortgage terms, reverting to the standard variable rate at the end of their fixed term, which currently stands at 7.23%, would result in the loan of £208,277 and see them making a monthly repayment of £1,550 per month. 

Stephanie Daley, Director of Partnerships at mortgage advisor, Alexander Hall, said: “Nobody wants to pay more than they need to when it comes to the monthly cost of their mortgage, but that’s exactly what could happen if you allow your mortgage to drift onto a standard variable rate. 

“That’s why proactivity is key when it comes to renegotiating your terms. Although your current lender may offer you a product transfer offer, this is unlikely to be the most competitive option and doesn’t allow you to make other changes such as altering the overall term or loan amount.”