Whilst it would be foolish to try and predict if this really is a good time to move, it is worth looking at the mortgage market to see what you should be considering.

According to Moneyfacts, the independent financial information provider, mortgage rates have fallen to their lowest level for seven years and, for example, the average rate on a two-year fixed rate mortgage has now dropped to 4.52%, the lowest level seen since September 2003. Michelle Slade, spokesperson for Moneyfacts said, “Previously, only deals for borrowers with large deposits were seeing cuts, but as the market improves, those with smaller deposits are being offered more competitive deals too.”

A lot of borrowers compare the cost of different mortgages using the interest rate and lenders battle it out to see who can offer the lowest fixed or tracker rate deal. In the last few weeks some excellent fixed and tracker deals have come onto the market. However, if you are shopping around, the interest rate is only one of the factors you should consider.

Many fixed or tracker rate deals will come with a product arrangement fee. In most cases you can add this to the loan amount, but if you choose to do this interest will also be payable on the amount of the fee. Fees can vary significantly but in general the lower the interest rate, the higher the fee. Some fees are also calculated as a percentage of the loan amount. For example, you may be able to obtain a 2-year fixed rate deal at 2.89% with an arrangement fee of 2.50% of the loan amount. This would mean that for a loan of £80,000, the fee payable would be £2,000. The interest rate on this deal may appear exceptionally low, but when the fee is taken into account it is not as good as it seems.

The variation in fees has made it increasingly difficult to compare like-with-like. Which product 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.

Many lenders offer a range of mortgages with different interest rates. As well as allowing the lender to advertise a lower headline rate, the ‘high fee’ option may work out cheaper for a small number of very large loans. However, these are likely to be less attractive in our area where the average loan size is well below the national average. Some lenders do offer products without an arrangement fee, but these are increasingly rare.

It is also important to factor in the cost of valuation and legal fees. Some lenders may cover part or even all of these costs, which you need to factor in when comparing interest rates and arrangement fees.

As always, the key to securing the most appropriate mortgage deal is to keep asking questions.