£3,000 mortgage bill trap

GreeDy lenders rake in up to £10 billion a year in interest charges by switching homeowners on to expensive mortgages when their existing deal ends.

yorkshire Building Society, which launched Britain’s lowest-ever mortgage rate at 0.89 pc in April, moves customers onto its standard variable rate of 4.74 pc after two years.

A borrower who bought a property with a mortgage of £130,800 would see annual payments leap by £3,102 from £5,838 to £8,940, unless they switched to a new deal, says online mortgage broker Trussle.

It says Britain’s six biggest lenders are effectively charging borrowers ‘an inertia tax’ and that they could save up to £10 billion collectively by switching to a cheaper deal.