Mortgage rates are playing yo-yo

Many fixed rate mortgages are charging much higher mortgage fees these days. Lenders are taking no chances with borrowers. They want low-risk mortgage customers who can pay large fees to offset any risk that they will move on or fall into arrears.

What you should do is to consider not taking out a mortgage on a fixed rate. Check out the total cost of deals, including fees, when working out what suits you. Discounted variable rates and tracker deals are looking more tempting than ever. The average two-year variable rate stands at 6.66% - cheaper than fixed rates.

Secondly you could consider what is known as a drop-lock mortgage, which starts out on a variable rate with the option to move into a fixed deal at any time without penalty.

Thirdly, you could fix for a longer period and forget about the credit crunch for a while. If you are going to pay a whopping great fee you can minimize its impact by having your rate secure for five years for example. Average five year fixed rates are currently 6.66%, 0.02% lower than two-year rates.

Finally look for the most competitive mortgage deals and get in there quickly. There are still some great offers around