By James Rodger

Copyright birminghammail

Acting now could save mortgage borrowers £1bn, Lloyds Bank has warned. Around 135,000 fixed rate mortgages taken out in the last three months of 2020 on super-low rates are due to mature this year. Without taking a new deal these rates could triple to an average rate of 6.9%. Remortgaging on to new fixed rates could save over £700 per month. Borrowers could see the interest rate they pay almost triple as they move on to their lender’s “standard variable rate” (SVR). The average SVR is now around 6.9% and, with a remaining debt of around £177,000, would cause monthly repayments to jump to £1361 per month: a rise of £429. READ MORE Major update over calls for new 11pm to 9.30am bus travel rule in England For Interest Only loans, the monthly payments increase by £788. Lloyds told Birmingham Live: “Though interest rates have not returned to their all-time lows, there are still good, fixed rate deals available that will soften the effects of super-low rates ending.” Andrew Asaam, Mortgage Director at Lloyds, 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 lender 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.” Remortgaging a repayment mortgage to a Club Lloyds loan (4.14% fixed for 5 years, no fee) could save £275 each month compared to moving on to the average lender’s standard variable rate, with repayments of £1086.