The CashQuestions team looks at the best ways to beat the credit crunch with your mortgage - in order of preference!

Overpay

Since September the Bank of England base rate has tumbled from 5 per cent to it's current 2 per cent. This is its lowest point since 1951. Falling interest rates is great news for homeowners on base rate tracker mortgages as they mirror cuts immediately and automatically. For example, if you are paying 1 per cent over base on your tracker loan, the monthly repayment on a 25-year mortgage of £100,000 would have tumbled from £644 in September to £477 in December - that's a saving of £167 a month for doing nothing. 

But if you are lucky enough to be on a tracker and find you have some extra cash in your pocket, don't spend it! Remember that your stated monthly mortgage repayment is a minimum and that most lenders allow penalty-free overpayments on the proviso they do not exceed 10 per cent of the original mortgage debt each year.

So, instead, keep your repayment at the same level which, using the above example, will effectively mean you are overpaying by £167 a month. If you do this for the duration of the mortgage, you would pay it off 8.5 years early and save a staggering £15,373 in interest. Not only are you saving money, but you are getting out of debt quicker which, in uncertain economic times, is always the best place to be.

Borrowers paying their lender's Standard Variable Rate (SVR) - or a discount from its SVR - will have also benefitted from recent rate cuts, though not all lenders have passed every cut on in full.

Read more about the latest base rate cut here.

More and more borrowers are choosing longer-term fixed rate mortgages of up to 10 years, according to Spicerhaart Financial Services. There's an obvious attraction to fixed rates in times of uncertainty: they give borrowers the peace of mind of knowing how much repayments are going to be in the future. Securing a mortgage at a rate you can afford means there's no need to worry about interest rate movements during the period of the loan.

However, the downside is that you could end up paying over the odds - if interest rates fall during the time of your fix.

Borrowers who have spent the last two years comfortably sheltered by a cheap fixed rate deal could soon be in for a nasty shock. But prompt action can ease the blow. When it comes to mortgages, the most popular type to take is a fixed rate. According to recent figures from the Council of Mortgage Lenders, 89 per cent of first-time buyers and 73 per cent of homemovers take out fixed rates deals – and typically for short periods of two years. Two years can pass with frightening speed but borrowers coming to the end of a fixed rate deal this autumn have another shock in store – it’s going to cost them.