The Office of the Director of Consumer Affairs urges consumers to ensure they are comparing like with like when shopping around for a mortgage. Often the advertised rate is an introductory rate and will not be offered beyond the first year.

"When people are going out to buy a house, they shouldn't be consumed just with the house, but with the financial implications of their own budget. They must comfortably meet the repayments per month and take into account any adverse circumstances and ensure they should be able to meet those payments," said the spokesman.

Lenders may eventually be required to adhere to a code of practice which includes specifics in documentation. It may force lenders to include a "what if" scenario: if rates rise by 1 per cent the customer must pay back £X more per month.

Before entering into a contract, consumers should query the lender in terms of arrears, penalties, redemption fees and interest rate practices. Potential mortgage holders should shop around to get the best rate.

Existing mortgage holders should also examine their mortgages and the interest rates being charged on a regular basis. If unhappy with the variable rate charged, query the lender and depending on the response think about taking your business elsewhere.

Complaints about lenders may be directed to the Office of the Director for Consumer Affairs or the Ombudsman for Credit Institutions.