Mortgages are devilishly complex to set up, and for most of us, once we've got the mortgage all sorted, we're quite happy to leave it that way. However, there's a new breed of borrower, called (not very affectionately) ‘rate tarts' by the mortgage lenders, that look around for better deals and switch mortgages when they please.

They're making the most of a very competitive market, in which mortgage lenders are offering lower and lower interest rates to get borrowers through the door. It makes sense to switch mortgages if there is money, possibly a very significant amount, to be saved.

To combat this growing trend, some mortgage lenders have decided to up the ante, accompanying extremely low interest rates with ridiculously high set up fees. This is a double-edged sword because although it increases their profit margins, it reduces the lender's market share.

Here's a good example of this practice: Birmingham Midshires. They have a 3.89% two year fixed deal on the market at the moment. But yes, it is too good to be true. A closer look at the small print and the arrangement fee is quoted at £1499 – a lot more than the market average of £500. Break the fee up over 2 years at £749.50 per year, and it transpires that you'll be adding another ¾% interest on a mortgage loan of £100,000.

If you want to take the plunge and switch mortgages, you have to do the following calculations first, adding all the costs of remortgaging together to get a final figure. You need to include the arrangement fee (approx £500); valuation fee (approx £250 on a £100,000 mortgage); a booking fee (could be approx £50?); legal fees (around £350 on a £100,000 mortgage); and any charges levied by the lender for leaving your mortgage contract.

Once you have all the figures, contact your mortgage lender. Make sure they know that you are thinking of leaving, and see what they can offer you! Mortgage companies never call existing customers to offer them a better deal, but you'll be surprised at what they can pull out of the bag if you threaten to move your thousands of pounds in interest to another company. They may well offer you a quote as good as the other quotes you have obtained from rival companies.

Once you have all the figures in front of you, and you know exactly how all the deals compare, then you can sit down and decide if it's worth making the switch. If it saves you money in the long run then it's probably worth it, but it's always best to make an informed decision. We hope we've helped you on your way!

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