If your mortgage is more than two years old, it's time to move because you are definitely paying over the odds. No ifs or buts.

The logic is simple. The more equity you have in your home, the less risky your mortgage is for the bank. So why should you have to pay the same rate of interest as first-time buyers who must borrow most, if not all, of the price of their homes?

At long last, some lenders are giving a break to existing home owners by dropping prices to reflect the fact that they are inherently less risky. The demise of the one-size-fits-all mortgage heralds a major shift in the economics of the business and, if you play your cards right, you could effectively escape many of the interest rate hikes we have seen in the past year.

National Irish Bank grabbed the headlines last week with its new LTV mortgage, which slashes interest margins to the bone once the mortgage drops below 80% of the value of your home. This should be worth an annual interest saving of 1,500 for somebody who owes 250,000 on a house worth 500,000 according to the bank's calculations.

The big surprise is the speed at which the property boom has allowed people accumulate equity, even those who borrowed everything they could get their hands on by signing up for controversial 100% mortgages. According to research commissioned by NIB, a 100% mortgage taken out in Dublin or Cork at the start of 2004 would have dropped to under 75% of the house price by the early months of this year.

With this sort of equity under their belts, home owners are now firmly in the driving seat. When they applied for their 100% mortgages, these people would have gone cap-in-hand to the banks begging for money. Two years on, the tables have turned and, with a loan-to-value ration of under 80%, there will be no shortage of lenders eager for their business.

Before making the move, it is important to remember that there are a number of options out there. NIB charges different rates of interest on different bits of your mortgage. Bank of Scotland (Ireland) starts you off on a deeply discounted rate, especially if you borrow less than 75% of your house price, but then shifts you to a higher rate after two years.

At first glance, NIB looks the better bet because, with mortgages stretching for anything from 25 to 40 years into the future, it is foolish to allow yourself be distracted by introductory discounts.

But this ignores the speed with which people are climbing up the property ladder, with the banks reporting that the average life of the mortgages on their books has dropped to between five and seven years.

Given such a short lifespan, a hefty discount for the first two years can easily tip the balance in Bank of Scotland's favour. It all depends on how soon you are plotting your next move.

With NIB and Bank of Scotland poised to steal their customers, the big three mortgage lenders are growing ever desperate to protect their patch. In a move that has escaped largely unnoticed, Permanent TSB, Bank of Ireland and AIB have held back the full impact of rising interest rates over the past year from customers still on standard variable rate mortgages.

For example, when the European Central Bank hiked rates by another 0.25% at the start of the month, AIB raised its standard variable rate by just 0.1% while Bank of Ireland added 0.2%.

This is a costly defensive strategy, designed to reduce the incentive for customers to defect to NIB or Bank of Scotland. But with these newcomers offering such keenly-priced goodies, it is too little too late.