With economic forecasters now signalling that the drop in interest rates expected by the end of the year could be more substantial than previously expected, mortgage products which allow increased flexibility could be worth checking out.

ICS building society's new Flexifix mortgage provides borrowers with a two-year fixed rate mortgage while also affording them the option to switch back to the variable rate without incurring a penalty.

The mortgage is fixed at an interest rate of 5.75 per cent for the two-year period, but if interest rates fall below these levels, mortgage holders can decide to move on to a lower variable rate without incurring any additional costs. Building societies and banks are increasingly offering these types of mortgage deals.

Against the background of expected lower interest rates in the short term, fixed rate mortgages have become less attractive although they do provide a degree of predictability for new borrowers, ensuring their payments will remain constant over that period.

ICS has also introduced an option to help customers already on fixed rate mortgages to make yearly lump sum payments of up to 10 per cent off their mortgage without being penalised. In a low interest rate environment it is always worth paying down your mortgage as it will save you substantial interest payments in the future.

The society will also allow customers to take a break from repayments for three months up to four times during the life of the mortgage.