DON'T tell me. After months of searching, you've finally found the home of your dreams. It is a few bob more than you had planned to pay, ah but it's worth it... Then the thing you dread most happens; interest rates start to climb.

Immediately the banks and building societies withdraw the sweet deal you saw in the window and the papers are full of stories about rates rising by maybe more than a half of 1 per cent.

Well the advice seems to be don't panic you can still find a mortgage to suit your needs.

Anyone smart enough to have already negotiated their mortgage with a building society or bank at this stage may be able to still get that rate, if they move quickly to close it.

Most of the institutions will agree to honour an agreed fixed rate, but only for a short while. If you don't need to draw down your mortgage for a month or even six weeks, some may allow you to get your mortgage at the lower rate if you contact them now.

Otherwise, if you're still mulling over the options, the choices you face are basically the same, although based on a marginally higher rate of interest.

Since the currency crisis the appetite for fixed rate mortgages has grown, with more and more people opting for the security of fixed repayments to avoid sudden sharp increases in their monthly outlay. And the cost of doing this is very competitive.

All of the banks and building societies offer a wide range of fixed rate products, allowing borrowers to lock into specific rates for anything from one to five or 10 years.

Fixed repayments are probably the best option, particularly if, like most new home owners, you're going to be a bit stretched for the first couple of years.

One year, fixed rate products tend to be the most popular option and hence the most competitively priced. If you shop around you can probably expect to be offered a rate of between 6 per cent and 6.5 per cent. After a year, you can then opt to fix for another period or slip back into paying the current variable rate of interest.

Outside of this, you will have to decide how long to fix the rate of interest. Some people argue that it's hardly worthwhile fixing your mortgage unless you are going to do it for five years. While others prefer to take things a year at a time.

What you decide will largely be influenced by the best rate you find over that period, with three and five year products generally offered at much the same price by most institutions.

The main downside with a fixed mortgage is that you may end up locked into a higher rate, paying maybe £700 a month, say for five years, while the variable rate of interest may have fallen to £500 for some part of that time.

The longer the fixed rate entered into the greater the risk of being forced to pay over the odds, at least for some period.

There are broadly two scenarios which will determine where interest rates will go over the coming years. Most analysts are peddling the Economic and Monetary Union argument, pointing out that Irish interest rates have to fall to meet lower European levels, for the project to go ahead.

If this argument proves correct, then interest rates should fall by up to 1 1/2 per cent over the next 18 months, with some short term volatility likely. This view presupposes the smooth transition to a single currency in 1999.

On the other hand, if the whole thing falls apart, the uncertainty would trigger further volatility with no one entirely sure of the direction of rates in any of the EU member states then.

Depending on the view you are most inclined to accept, a variable rate mortgage, even at the new higher rate, could be the right option, giving you the scope to benefit from cheaper rates over the next 12 to 18 months.

TSB Bank offers a mortgage product which caps the maximum rate of interest that will be paid over a fixed period.

This also allows for a fall in repayments if interest rates drop, which seems to offer the best of both worlds. So don't despair.

If you want security, take the fixed option, and if you have some scope to cope with any possible volatility, maybe consider taking a discount for a year on the current variable rate of interest offered to new borrowers.