Borrowers were warned last week that the mortgage payment shock is set to escalate. Some families face having to pay as much as £3,000 a year more for a £200,000 mortgage.

Brokers said the situation was so bad that some homeowners should not bother remortgaging and should move instead on to their lenders’ standard variable rates.

Thousands of homeowners who put down a deposit of less than 10% in the past two years face the double whammy of coming off cheap two-year deals at the same time as house-price falls wipe out any increase in the value of their properties. This means they will be unable to take advantage of better mortgage deals.

Prices fell 2% last month to an average £180,344 — the same level as in August 2006 — according to Halifax, Britain’s biggest mortgage lender.

George Buckley, economist at investment bank Deutsche, said: “The repayment shock for those attempting to refinance two-year fixed mortgages is now huge. Given that a new mortgage approval requires a fresh valuation and that house prices look set to fall below their level of two years ago, homeowners may increasingly drift on to SVRs as two-year fixed-rate deals expire.”

More than 500,000 homeowners put down a deposit of 10% or less when they took out mortgages in late 2006 and 2007, the Council of Mortgage Lenders said.

Fixed-rate loans for those with less than 10% equity have risen 2.15 percentage points, adding £265 a month or £3,181 a year to the cost of a £200,000 mortgage, according to Moneyfacts, the financial analyst — this is double the payment shock that people faced at the start of the credit crunch.

In August 2006, there were more than 100 two-year fixes for those borrowing more than 90% at an average rate of 5.13% said Moneyfacts. Now, there are so few providers that the Bank of England has stopped collating data. This month, just 12 mortgages were available for borrowers with a deposit of less than 10%, at an average rate of 7.28% — considerably higher than the average SVR at 7.08%.

Here we answer your questions.

I bought with a 10% deposit. Any advice?

It’s likely you will have less equity in your property than when you bought. Prices are back to where they were two years ago and surveyors are submitting lower valuations.

Melanie Bien of Savills Private Finance said: “I would advise borrowers with a deposit of less than 10% to stick with the SVR — that way they avoid a valuation that could put them into negative equity. This would not allow them to remortgage at all.”

The cheapest two-year fix from Direct Line at 6.89% with a fee of £499 would cost £34,088 on a £200,000 loan over two years. Two years on an SVR of 7% would be £34,170.

I have more than 10%. Is it as bad?

Last week Halifax cut its two-year fix for those borrowing 75% of the value of the property by 0.57 points from 7.24% to 6.67%. Abbey also reduced fixed-rate deals by up to 10 points for those with a deposit of 25%.

Homeowners who have at least 20% equity are eligible for First Direct’s two-year fix at 5.98% with a £1,998 fee. Monthly repayments are £1,286 against £1,423 on the SVR.

What should I do about my valuation?

Borrowers who are coming up to remortgage can use their savings to increase the equity in their home. This could mean the difference between a rate of 6.67% from Halifax for those with at least a 25% deposit and 7.29% for those with a 10% deposit. This is a saving of £79 a month on a £200,000 loan.