Mortgage holders are paying around €119 million more than they should every year, the EBS Building Society said yesterday.

Head of mortgages at EBS, Dara Deering, said too few mortgage holders were shopping around for cheaper rates.

Some borrowers were not receiving the benefit of improved rates or products from their lenders, Ms Deering said, while others signed up for mortgages that were not competitive. She expects mortgage switching to grow this year, as competition drives down costs.

"We estimate there could be up to €3.7 billion switched, a 19 per cent increase on 2005."

She points out that taking a 20-year mortgage down to 3.5 per cent from 3.7 per cent would save the mortgage holder €6,206 over the loan's term.

Ms Deering based her calculations on the difference between the average variable rate and EBS's in 2004. The EBS standard variable rate (APR) is 3.6 per cent. Rates range from 3.55 per cent at AIB and Bank of Scotland to 3.9 per cent at First Active.