By Chris McDonald, of the Cumberland Building Society

Last updated 01:07, Friday, 16 May 2008

• Vist the Cumberland Building Society website

Which mortgage? The choice is wide and there are so many price factors to consider

Over the next six months, more than 7,000 mortgages in Cumbria and South West Scotland come to the end of their tie-in period.

This means that borrowers will be faced with the prospect of paying their lenders’ standard variable rate or searching the market for another fixed or discounted mortgage.

But with almost 3,000 different products available, where do you start?

Comparing the cost of most household goods is easy. The price you see is the price you pay. But things aren’t quite so straightforward when it comes to paying for your home.

As well as comparing the interest rate, arrangement fees for a two-year discounted of fixed rate mortgage can vary from nothing to £1,500.

Then there are legal and valuation fees. Some lenders include these in all their remortgage products. Some don’t. If not, they can add over £500 to the up-front costs.

The variation in fees has made it increasingly difficult to compare like-with-like. One loan may offer an attractive headline rate, but charges a high fee, whereas another may charge a higher rate, but comes with a lower fee.

 Which is best for you depends on a number of factors, including the size of your loan and the length of the deal.

The fee is particularly important on short-term deals where the cost is spread over a two- or three-year period rather than five years or longer.

 Some lenders, including the Cumberland, have a comparison service which allows you to directly compare the cost of mortgages from different lenders in the branch. National price comparison sites such as moneyfacts.co.uk also allow you to compare the total cost of different mortgages over the fixed rate or discounted period. But, even here, things are not quite so clear cut.

 If you ask two comparison sites which is the national best buy, you may receive two different answers. This is because some exclude mortgages which have arrangement fees above a certain level, or those which are only available to customers borrowing a low percentage of the property value.

 As with any other purchase, the key to securing the most appropriate mortgage deal is to find someone you trust and keep asking questions.

 Find out what the policy of your lender is when you come out of the early redemption period. At this point, you will be free to move your mortgage without paying an early redemption charge, but many lenders hope you will stay with them and move on to their standard variable rate.

 Ask your potential lender what their standard variable rate is and see how this compares to other banks and building societies. This can be a good indication of whether they will offer long-term value. And talk to friends who have been with that organisation for a number of years to find out how they treat existing customers.

 Then make a note in your diary to start the whole process again two months before your new mortgage comes to the end of its term...

 For details of the Cumberland’s remortgage and cost comparison service, call 0845 601 8396, pop into your local branch or visit www.cumberland.co.uk.

 Your home may be repossessed if you do not keep up repayments on your mortgage.

• Chris McDonald is the assistant general manager – marketing of the Cumberland Building Society.