"Two thirds of borrowers say their lender has never told them they could save money by switching."
The charity calculates that 1.2 million people would be better off if they switched to a new deal - with 1 in 10 paying over £1,000 a year extra by staying on the standard variable rate.
First time buyers, who typically have more debt and more time left on their mortgage, face paying an extra £1,359 a year once their two-year fixed deal expires.
Citizens Advice wants the Financial Conduct Authority to make all lenders provide clear information to new and existing customers about how much they could lose by rolling onto a standard variable rate.
It also says the FCA should consider changing the name of the default mortgage rate to help customers better understand the changed nature of the contract, replacing ‘standard variable rate’ with ‘expired rate’, for example.
The charity’s report also finds low awareness of the problem - with over half of people (51%) on expired fixed term mortgages wrongly think they pay the same or less than newer customers.
Two thirds of mortgage holders say they have never been informed they could save money by switching.
Citizens Advice Chief Executive, Gillian Guy, said: “More than a million loyal mortgage customers are being stung with higher interest charges when their fixed deals end.
“Buying a home is a major life decision and borrowers taking out their first mortgage often spend a great deal of time working out the best option for them. Our research shows that many who choose fixed rate mortgage deals face steep price hikes once they expire. But two thirds of borrowers say their lender has never told them they could save money by switching.
“Lenders must be more upfront and provide their customers with clear information about what could happen to the cost of their loan once the fixed term period ends.”
