Research by the Council of Mortgage Lenders has found that towards the end of last year, some 1.8 million householders had reached the end of their fixed-term deals and moved to a variable rate. The industry body said that the move had been worth a total of £4 million or “an average of around £2,600 for each borrower”

The results might be seen as surprising, since most lenders’ standard variable rates (SVRs) are higher than their fixed-term rates. Nevertheless, they’re based upon the base rate set by the Bank of England, and so have fallen since the credit crunch due to a series of emergency rate cuts made by the central bank.

Despite this, the CML warned some homeowners of a possible “payment shock” if their fixed-rate deals are set to expire over the next 24 months – some 1.5 million people. Its report noted that “many of the loans that are due to mature in the coming years were initially advanced in 2009 and 2010 when mortgage rates had already fallen from the 2008 peak”.

“These borrowers might not see the same interest rate windfalls as the borrowers who have recently come to the end of fixed rates on loans that were advanced in 2007 and 2008.”

The CML report also gave hope to homeowners and those hoping to get a foot on the property ladder. According to its figures, overall mortgage lending increased by 4 per cent last month compared to September 2010. Last month saw a total of £12.9 billion worth of mortgages agreed with borrowers.

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