Fierce competition among lenders means some great deals for borrowers. Abigail Montrose seeks them out
Mortgage lenders are bending over backwards to attract new business, which is good news for home buyers. The range of products on the market has never been better and there are some great deals to be had.

Currently, fixed-rate deals are attracting most interest. Recent hikes in interest rates have seen borrowers looking for security and, with many lenders expecting interest rates to be lower in the medium term, fixed- rate mortgages are being attractively priced.

Fixed-rate mortgages are usually for two or five years, with the five- year market offering some particularly attractive deals. One of the cheapest five-year fixes on offer is 5.99 per cent from Northern Rock. But watch out for the hefty pounds 495 application fee, and the compulsory buildings and contents insurance. You will also be tied to Northern Rock for two years after the fixed rate has elapsed.

Attractive five-year rates are also offered by Abbey National, John Charcol, Nationwide and Halifax but, again, you usually are expected to remain with the lender for a further year or two once the fix has ended.

For those who want to ensure their mortgage repayments do not rise above a certain level but want to benefit if interest rates fall, a capped- rate mortgage is the answer. Among the best deals on offer is Bradford & Bingley's four-year capped rate of 6.25 per cent. The arrangement fee is pounds 295 and there are no compulsory insurances, but you will be expected to stay with the society for a further two years.

If you want to avoid redemption penalties after the capped period, you could consider John Charcol's 6.55 per cent cap, which runs until end of June 2003, or Halifax's 6.8 per cent capped mortgage where the cap lasts until end of August 2002.

For those who want a variable-rate mortgage, there are plenty of good discounts available. "One of the lowest two-year deals on offer is the Scarborough Building Society's 3.99 discount," says Simon Tyler of mortgage brokers, Chase de Vere Mortgage Management. "If you're looking for the deepest discount over two years this is currently it. But with compulsory insurance it might not be the best deal around."

Those looking for a five-year discount could consider Nationwide's 1.35 per cent discount. While not be the largest discount around, Nationwide's standard-variable rate is 8.1 per cent, against the average for all lenders of 8.7 per cent, which brings the rate down to 6.75 per cent.

"Another option is cashbacks, although these are less popular than they used to be," says Mr Tyler. But for those who like this option, perhaps because they plan to use the cashback to fund the deposit, there are good deals around.

Northern Rock is offering an 8 per cent cashback on its standard variable- rate mortgage and Leeds & Holbeck is offering a 7 per cent cashback on loans up to 85 per cent. In both cases, early redemption penalties last for six years.

John Charcol: 0800 718191; Leeds & Holbeck: 0500 225777; Abbey National: 0800 555100; Northern Rock: 0845-605 0500; Halifax: 0800 101110; Nationwide: 0800 302010; Scarborough: 0990 133149; Bradford & Bingley: 0800 570800