Most people entering into a mortgage tend to go for one of the many reduced or fixed rates on offer.

Many mortgage lenders are cutting initial mortgage costs in order to attract new business.

One of the biggest problems they face is what to do when the discounted or fixed period finishes, which was highlighted by an Argus reader last week.

He had entered into a three-year, fixed-rate mortgage with the Cheltenham & Gloucester and now wanted to know what he could do to keep his payments down.

Often, one answer is to remortgage with another lender. In a similar way to how lenders are clambering over each other offering many cut-price mortgages for house movers, many are also offering discounted schemes for remortgages.

In fact, many lenders also meet the cost for remortgaging by covering the cost of the survey and solicitor's fees.

However, there are often lock-ins whereby the new mortgage company would charge a penalty if you wanted to get out of the new scheme. This would be a problem for this particular reader because although he wants to reduce his payments, he also is thinking about moving soon.

One option I suggested was for him to contact his current lender,to ask if they could suggest anything.

They offered a competitive fixed rate but with the usual lock-in penalties, which he wanted to avoid.

I suggested he went back, told them all he wanted was a reduced rate but with no penalties if he decided to move in the short term.

The building society offered a one per cent discount for five years off their standard variable rate with no early penalty and no fee.

This was a very low-cost way of reducing his payments and he still has the flexibility of moving and changing his mortgage without paying a penalty.

This just goes to show that if you think you are paying too much for your mortgage it may be wise to start by asking your existing lender if they will reduce what you are paying. After all, what have you go to lose!

By financial specialist Garry Spencer of Worthing-based Wilbury Financial Management.

Wilbury Financial Management is a member of IFA Network Ltd, which is regulated by the Personal Investment Authority. The PIA does not regulate mortgages.