Research by Experian and L&C Mortgages has found that borrowers in the UK could get this lump sum on their mortgage payments if they switch to a new two-year fixed rate offer.
Data from Experian revealed that nearly six percent of homeowners could end their fixed-term contracts in the next three months or over the next three months.
Therefore, there will be a substantial number of people who will have to remortgage in the near future and who can get that £ 5,000 back.
In their research, the two companies used a hypothetical example to determine whether the change in mortgage agreement would benefit families financially.
In this situation, a homeowner with a mortgage of £ 150,000 over 20 years at a Standard Variable Rate (SVR) of 4.49% from the lender would have a monthly repayment of £ 948.16.
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The same mortgage on a two-year fixed rate 1.11% remortgage agreement will have a monthly repayment of £ 697.23.
This would represent an estimated saving of £ 6,022.32 or £ 250.93 per month for families who may need the extra money.
As a result, households would get around £ 5,023.32 over the two-year period, after factoring in the arrangement fee of £ 999.
James Jones, chief consumer officer at Experian, explained why this is the perfect deal for households for 2022.
DO NOT MISS
Mr Jones said: “Homeowners may be able to see substantial savings by switching to a new fixed rate mortgage deal, so we urge anyone with a fix ending soon to consider their options.
“Doing nothing will mean you will revert to your lender’s standard rate, which will usually result in an increase in your monthly payments. With an interest rate hike looming, it would be worth exploring your options now and getting a new rate locked in.
“You can get help exploring your options by asking a free mortgage broker for advice.
“It’s also worth taking a moment to review your credit score and, if possible, make improvements before any formal credit check. “
David Hollingworth, Associate Director at L&C Mortgages, added: “With the cost of living rising, it’s more important than ever for consumers to shop around and find a better deal.
“They could save hundreds of pounds a month by switching to a fixed rate mortgage and also protect themselves against a rate hike.
“There are still competitive offers in the market, but if the expectation of an interest rate hike persists, the currently available offers may not last too long.
“Use a mortgage comparison to see if you’re on the cheapest deal or if you can save money by using another company’s offer.
“When thinking about the change, don’t forget to factor in all other costs and check if there are any early exit fees associated with your current deal.
“However, shopping around could help save thousands of pounds over a short period of time.”
Last month, the Bank of England’s monetary policy committee voted to raise the base rate, the lowest interest rate, to 0.25% from 0.1%.