With interest rates rising over the past few months, it is difficult to comment on individual mortgage deals too far in advance. However, many people thinking of moving home, or re-mortgaging, face a number of choices and a 'snapshot' taken in mid summer might help. By our Financial Consultant RIZWAN SABIR.

There is considerable appeal in looking at fixed rate mortgages, not least of which is that they offer certainly over the level of outgoings for an agreed period. This can be as little as two or three years, as long as the entire term of the mortgage.

Conversely, many fixed rate deals like other non-standard mortgages can include penalties that can last longer then the fixed, discounted or 'special offer' period.

More importantly to many people, tying yourself, in to a fixed rate could mean that you end up paying more than necessary, later on, should mortgage interest rates generally fall below the level at which your rate is fixed. It is here the existence of a tie-in can be critical.

What's more at the end of the fixed rate period, you will usually find that you are tied into the then current Standard Variable Rate; which may or may not be competitive.

Looking at the range of mortgages on offer from just one society, it is possible to see that headline rates range from 5.89% for a three year fix, to 6.39% for a 25 year fix. (Source: Leeds & Holbeck Buildings Society July 2004). This might be taken to indicate that the lender does not expect interest rates to rise significantly in future-otherwise they could find themselves charging far too little in later years.

On the other hand, all lenders operate in a competitive environment and it could be considered that they are prepared to offer lower long term interest rates than be indicated by the expectation of future rises in general interest rates, simply in order to retain market share, today.

Similarly, provided sufficient profits can be made in the early years of a loan, making a modest loss later on could be sustainable.

It is important to look beyond the headline rate, to see what the typical APR rate is, as this is the only fair basis for comparison

Selecting the right mortgage deal for you, whether it is a fixed rate, tracker, capped, variable or one of the new 'offset' mortgages, it is important to ensure that you are fully aware of any terms that apply. Taking a view on future interest rate movements becomes slightly less daunting, if there are no major tie-ins that prevent you from switching to a more beneficial basis of borrowing later, should interest rates move significantly against you. Most importantly, taking independent financial advice is essential, if you to come to the right decision.

e-mail: enquiries@sagegroup.co.uk or visit: www.sagegroup.co.uk

Sage Financial Management Limited is authorised and regulated by the Financial Services Authority.

Mortgages are not regulated by the FSA.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOAN SECURED ON IT.