Need a cheap mortgage? Who doesn't? The trouble is that with the recent upheaval in financial credit markets around the world money is no longer cheap, and therefore there's not much chance of a cheap mortgage any more.



Of course, most providers claim they offer cheap mortgages. They are not likely to advertise expensive mortgages, after all. It is therefore, important to look behind the headlines which battle for your attention and look at the figures and fees in detail, as in the example above. No matter what label the lender puts on a product, to find the cheap mortgage that suits you, you will need to do your own homework, or at least, with the help of a mortgage broker or mortgage adviser.



To find the best cheap mortgage deal you need to look for a competitive interest rate for the type of mortgage you want over the period you want. There are so many mortgage products on the market (over 8,000) and with many of them claiming to be cheap mortgages you may miss out on the best if you simply walk into a high street bank. Small differences at the start of a mortgage can make big differences in the total amount you repay. It is always sensible, therefore, to take professional mortgage advice. Mortgage advisers can save you a lot of time and money because they have access to all the mortgage packages on the market, and they know where to find the best cheap mortgages.



Of the cheap mortgages on the market at the moment one of the best is a 4.99% fixed rate until 30 November 2009. Let us assume you need a £125,000 mortgage on a property estimated to be worth £200,000 and you want a term of 25 years. That 4.99% reverts to the lender's standard variable rate for 35 months - the rate currently being 7.74% - and then it changes again, to a long standing borrowers rate of 7.34% for the rest of the period of the mortgage (around 20 years). Other incentives that come with this cheap mortgage are free Accident Insurance for six months, free Sickness Insurance for six months, free Unemployment Insurance for six Months. Importantly, as well, there is no higher lending charge (HLC).



With this cheap mortgage your estimated monthly payments would be £730 for the first period of fixed 4.99%. For the next period of 35 months the estimated monthly payments would be £929, and for the rest of the mortgage term, your estimated monthly payments would be £901. All that means that you would pay £142,117 in interest, and would need to pay back the original loan of £125,000. With fees, the total amount repayable is £269,626. The fees are an arrangement fee of £1,999, a valuation fee of £175, a valuation admin fee of £125 and a redemption fee of £210. Other costs you might incur are survey costs at £315, fund transfer fee of £25 and legal fees of around £400. Stamp duty payable on a property worth £200,000 is at 1% - or £2,000.



Even with cheap mortgages, the costs mount up.