Money Help Desk: Beware costs of a cheap fix

I AM paying a standard variable rate on my mortgage of 4.8 per cent, and would like to lock into a cheap deal while rates are low. The best offers include a very high arrangement fee. Is there any way of making the move cost effective?

BR, Edinburgh


John Postlethwaite, mortgage adviser, Punter Southall, writes:

WITH interest rates at current levels you are wise to consider fixing. Swap rates have been increasing over recent weeks and this means that fixed rates will rise in the short term.

Across the market there are many combinations of rates and fees on offer. Many lenders have a headline rate to attract you in. However, these tend to have very large application fees.

Application fees are either calculated as a percentage of the loan or as a flat fixed fee and in general the higher the level of your borrowing, the more advantageous a fixed fee becomes, with percentage fees looking more attractive for smaller loans.

Look at the total cost of any mortgage you take over the fixed rate period. This should take into account interest and monthly repayments, plus all the associated costs involved with the scheme during the fixed rate period.


Worry over late tax disc

I LEFT it a bit late renewing my tax disc because I was away for about a month and came back to realise it had expired during that time. I have renewed online but it will take a few days before the disc arrives in the post. Can I legally drive without the disc even though the road fund licence has been renewed? And are there any insurance implications if I were to have an accident?

CJ, Glasgow


Ian Crowder of the AA writes:

YOU are legally taxed but you still run the risk of picking up a fine. It is an offence not to display a current tax disc on your vehicle so a parking attendant or police officer could spot that the disc is missing and you will face a £30 fixed penalty. However, the lack of a tax disc won't affect your insurance or result in points on your licence.