Experts said this means a two-tier mortgage market has now developed in this country.

People who took out home loans with the non-bank lenders are set to be hit with increases of up to 3.5 percentage points in the interest on their ­mortgages when their fixed rates end.

It is estimated that up to 80,000 homeowners are due to come to the end of fixed rates this year across all the lenders.

The Irish Independent Doddl.ie Mortgage Switching Index shows that while some pillar banks have reduced their rates by up to 1pc, non-bank lenders such as Finance Ireland and ICS are stuck at the height of the market due to different funding models.

It means mortgage holders with these institutions could face repayment rates of over 6pc when they exit their fixed arrangements.

Doddl.ie chief executive Martina Hennessy said the thousands of borrowers whose mortgages are with the non-bank lenders should shop around and get market-based advice when they come to the end of their fixed terms.

“There has been significant downward movement on rates recently. ­However, there is a large disparity across the market,” Ms Hennessy said.

There has been a recent surge in switching, driven by the downward movement in mortgage interest rates, with approvals up 24pc annually to the end of June.

The latest quarter two Irish Independent Doddl.ie Mortgage Switching Index reveals a €7,200 difference in annual payments between the highest and lowest mortgage rates currently available.

Ms Hennessy said this highlights the huge opportunity for homeowners to save by switching.

With standard rates ranging from 3.6pc to 6.9pc, homeowners could save as much as €602 a month by securing the lowest rate, she said.

This is based on the average new mortgage drawn down in the last quarter of €309,679 over 25 years.

The savings are even more for those eligible for green rates, which are the lowest on the market at 3.45pc.

Ms Hennessy said that banks can part-fund their borrowing through their own deposits, a cheap source of funds for them.

But non-bank lenders do not have deposits and have to source funds on the open markets – meaning that they are struggling to remain competitive.

She said that ahead of the European Central Bank’s first rate reduction in June, the four main lenders reduced rates by up to one point and rolled out new offerings, including up to 2pc cash back.

“However, non-bank lenders continue to offer rates which are in some cases over 2pc higher than the pillar bank rates,” she said.

“Non-bank lenders have a key role to play in the Irish mortgage market, ­offering choice to consumers. However, for now, they appear to be curtailed in offering competitive rates due to their funding model.”

Mortgage holders who are ­coming off typical three-year fixed rates of 2.25pc could be rolling on to repayments of ­either 6.7pc variable or 5.75pc to ­secure another three-year fixed rate with ­Finance Ireland.

This is 3.5 points more than they locked in at originally and could mean monthly increases of €579 on an average mortgage of €300,000 over a 25-year term.

The Doddl.ie boss said switching could be a game-changer for many.

Ms Hennessy said switcher packages are an added incentive, ranging from €1,500 right up to 2pc of the mortgage back in cash.