(For more about this choice, read Should I go for a fix or a discount?)
• If rates are on an upward trend, a fixed rate will protect you from further increases.
• If rates are falling, a discounted variable rate should reflect these falls, and if you choose a tracker version you will benefit right away. (To read about how tracker deals work, go to Base rate trackers).
Mortgage lenders generally set their standard variable rate of interest around which they create their fixed-rate and discounted deals a couple of percentage points above the Bank of England’s base lending rate.
No one can say for sure from month to month whether the Bank of England is about to raise or lower rates or leave them unchanged.
It is, however, possible to get an idea of the general direction rates are expected to take by keeping your ear to the ground.
But that doesn’t mean canvassing opinion among your friends, workmates or neighbours unless, of course, they’re mortgage brokers, bankers or economists.
The Bank of England sometimes give hints about its plans, so check the media regularly to get an idea of current informed thinking and use this to help you decide whether to go for a fix or a discount.
Unfortunately, mortgage lenders will be one step ahead of you, and this can make it tricky to find a truly good value deal.