The mortgage market is now about as competitive as it has ever been. But there are so many different deals now on the market that it is very difficult for potential home buyers to decide on which is the best rate to go for. According to Bryan Moloney, of Moloney Mortgages in Donnybrook, most people are still opting for variable rate loans or, sometimes, one-year fixed rates.

"Variable rates are still not as low as they're going to go," he says. "And it makes sense to hold out for rates of 4 per cent to 4.5 per cent which should be available very soon.

"Even the 5.1 per cent on offer from EBS is expensive," he says. "Lenders have certainly not passed on savings yet and relative to where inter-bank rates are, mortgage rates are more expensive than ever."

However, "competition will force rates down very soon. Some loans are nearly at 6 per cent and the cost of funds is only 3 per cent. Normally banks only make about 1.5 percentage points rather than two or even three points", he says. On the other hand, one-year fixed rates are available at around 4 per cent, which is very good value for new borrowers. Longer term loans are rarely taken out. According to Mr Moloney, about 98 per cent of all the loans done by the business are one-year fixes or variable rates.

But it is also important to remember many of the lenders offer very attractive rates that look great on paper but at the end of the term of your mortgage you could have ended up paying thousands more with one lender than another.

Perhaps the most important figures to look at when deciding on a mortgage is a particular lender's standard variable rate without any first year discounts or other special deals. After all, that is the rate you are going to be paying when you come out of whatever special offer you first go in on.

And with the longest fixed rate generally lasting only five years, and many more people opting for one-year loans, that often leaves as much as 19 years on the lender's standard variable rate for existing borrowers.

Borrowers should also be careful to check what sort of a deal existing borrowers are getting. Many lenders charge existing customers substantially more than new customers and even in the table, some of the lenders will not even advertise what rates their existing customers got. Again the same warning applies, you will be an existing customer for far longer than you will ever be a new customer.

Most of the lenders rely on borrowers' inertia and this is why they offer new borrowers much better deals. After all, it can cost up to u1,000 £1,000 to change lenders after paying for conveyancing and so on over again.

Most people are still opting for one year fixed rates. Most of these are still available at around 4.5 per cent, although EBS is cheapest at 4.4 per cent, just a little behind Irish Permanent, and even Irish Life, at 4.45 per cent. First Active is offering a one-year fix at 4.5 per cent, as are ICS and Bank of Ireland.

Many people still believe interest rates may be going to fall again and indeed this is also the consensus on the money markets.

However, as the saying goes, if anyone knew for sure what the markets were going to do they would be so rich they would not be working. So, anyone with a very large mortgage which would be difficult to carry if rates were to increase even by, say one percentage point, should certainly consider fixing for longer.

First Active has a deal where the first year is at 4.5 per cent, followed by three years at 5.1 per cent, which Irish Life has mirrored. EBS offers three-year and four-year fixes at 4.9 per cent and five years at 5.1 per cent.

Many people, particularly those who think they may be coming into a lump sum, would prefer not to fix. But it is important to remember that it is possible to fix a portion of your loan to give you security and keep the rest on variable, or even fix different amounts of the loan for different periods. Other ways to save money include asking the lender to waive the indemnity bond. Some brokers say that Irish Permanent will often do this, while other lenders may pay for the valuation. Both of these can save a couple of hundred pounds at a time when finances may be quite tight.

Among the variable rates, EBS is cheapest at 5.1 per cent; ICS has 5.49, with Irish Permanent and First Active at 5.5 per cent.