How It Can Pay To Switch Loans

April 1994: Homebuyer takes out a pounds 100,000 mortgage with the Royal Bank of Scotland which is fixed at a rate of 8.5 per cent until March 2004.

December 1998: Homeowner remortgages to a Woolwich "Open Plan" mortgage, fixed at 6.19 per cent to 1 January 2004.

Difference in rate: 2.31 per cent, a guaranteed saving in interest payments over the next five years of pounds 11,203.

Redemption penalty: pounds 4,250.

Costs of switching: pounds 850.

Net saving: pounds 11,203 - pounds 4,250 - pounds 850 = pounds 6,103.