Next year, hopefully, there will be an end to what can only be described as a mortgage nightmare for hundreds, if not thousands of homeowners who fixed their mortgage interest rates for five years back in 1992-93, at the height of the currency crisis.

For many, this has meant paying a rate which is up to 4.5 per cent higher than that paid by people who remained on a variable rate - which has been about 7.5 per cent for nearly three years. The effect of such a higher rate on a standard £50,000 mortgage is the difference between paying £375 and £575 a month or £2,400 a year.

Mr L from Terenure in Dublin took out his £50,000 mortgage in October 1992 at the height of the crisis when variable rates were, in some cases, as high as 18 per cent. With average homeloan rates for the previous 30 years having been 11 per cent, Mr L was convinced that setting his rate for the next five years at 11.8 per cent would provide him with payment stability and peace of mind.

Neither he, nor his lender, to give them their due, could at that turbulent time have foreseen the earlier than expected arrival of the Celtic Tigercub (as it was five years ago) or the impact that EU fiscal discipline would have on inflation and interest rates.

Mr L is now going to save about £175 a month by reverting to the standard variable rate. For most people this represents a sizeable boost in cash-flow and could be used to reduce other expensive personal debt such as credit card balances, bank loans and overdrafts. A sum like this is also sufficient to help fund once-off items such as school fees, holidays and home improvements through bank budget plans. (These schemes work on an overdraft-as-you-need-it basis with payments spread over the year.)

Unfortunately, Mr L's long-awaited financial turnaround has been tempered by the additional news from his lender that the endowment policy he was convinced to take out at the same time as his fixed-rate mortgage needs to be boosted with an additional contribution of £22 a month, increasing that monthly payment from £138 to £160. Five years after taking out the policy, and paying in slightly more than £8,300, his endowment fund is worth £4,800.

The endowment mortgage market was finally exposed as an opportunity for lenders to earn substantial commissions in 1992, but it took another two years before the bottom fell out of it, and borrowers reverted back to better value repayment mortgages.

Mr L was obviously unaware of the debate that went on at the time - mainly focused on the high upfront commissions and costs being charged against early premium payments, the loss of the tax relief benefit and much lower investment returns.

The five-year review carried out by the endowment provider in this case has shown that Mr L's investment fund was not on course to pay off his mortgage in 15 years time and he would have to increase his premiums by nearly 16 per cent if a shortfall was to be avoided.

A critic of the endowment mortgage market, independent financial adviser Mr Eddie Hobbs, who is also a director of the Consumer Association of Ireland, describes this case as "typical", but gives credit to the life assurance company and lender for undertaking a five-year review. "There are insurers out there who have still not provided customers with 10-year reviews," he says.

(In Britain, where endowment mortgages are more common than here, Coopers & Lybrand warned in October that up to a million people are at risk of not having sufficient funds in their endowment policies to pay off their mortgages. They have urged life assurance companies to undertake widescale reviews to avoid what could be "another misselling disaster".) Our reader needs to seriously consider whether he should continue this endowment policy, or cash it in and put the proceeds towards the £50,000 capital he still owes the lender, says Mr Hobbs.

He can then use his additional £175 a month "savings" from his adjusted interest rate to accelerate the capital payments on the loan. Such an accelerated payment will fairly quickly return his account to the level it would have been at had he been paying a standard variable rate mortgage right from the start.

"Endowment mortgages are not suitable home repayment vehicles at a time of low inflation, low interest rates. They were designed at a time when they carried a tax deduction on the life policy and when returns were high enough to offset the high charges, repay the loan and provide a surplus. This simply is not the case any more," says Mr Hobbs.

Anyone with an endowment mortgage should have it reviewed if this has not already been done, and insist that their lender or insurer provide a realistic growth assumption on the investment fund - say, no more than 5 per cent. "You need to make sure that your lender takes this matter seriously," says Mr Hobbs.