Now is the time to consider a fixed-rate mortgage, independent financial advice firm Bestinvest has suggested.

Customers looking for a new mortgage should consider a fixed rate, even where the lender’s standard variable rate (SVR) is lower, according to the firm.

“Mortgage rates have hit the bottom, even though the base rate may fall further,” Pete O’Donovan, head of mortgages at Bestinvest said.

Margins on new trackers are being raised to keep the minimum initial pay rate at around four per cent, while over the past three months fixed rates have only fallen one per cent against a 3.5 per cent fall in the base rate.

Although people on existing deals that track below the base rate can still expect cuts, but the likelihood is that as the Bank of England’s rate moves toward zero, a collar will be introduced.

“These are loans – and people hoping for lenders to start paying interest back out to customers will be disappointed,” Mr O’Donovan said.

If banks are unlikely to cut their rates any further, this could be a great time to grab a fixed-rate deal, Mr O’Donovan argued.

“Very few lenders will pass on further cuts – so now maybe a good time to consider a fixed rate.

“The fixed rates start at around four per cent as well so there is no real difference in the initial pay rate.

“For new borrowers looking to purchase the most likely major change in mortgage rates will be upwards – so fixing is something worth looking at.

“We don’t see rates increasing in the next few months – but if lenders feel there will be no further downward movement, they will start to increase fixed rates as these will be the most popular choice in a rising market.

“Over the long-term, fixing looks like a smart move for most borrowers and the best options available are with Alliance & Leicester at 3.69 per cent for two years and Woolwich at 4.69 per cent for five years.”