Fixed-rate mortgages have become poor value as the fallout from the credit crunch continues, figures showed today.

Two and three-year fixed rates can cost almost £2,000 more than the cheapest discounted rates when the overall cost of the loan is taken into account, according to Mform, the online mortgage broker.

Francis Ghiloni, marketing and business development director at Mform, said: "The credit crunch has made accessing funding for fixed-rate deals increasingly difficult and made them less profitable for lenders, who are now imposing high prices for the certainty they offer.

“The cost of security appears to be excessive and fixed rates are now uncompetitive across the board for most product areas. Even standard variable rates can be more competitive on a true-cost basis.”

Lenders have increased mortgage rates repeatedly over the past year as the cost of securing funds on the money markets has risen. This has led to the unusual situation of fixed rates being almost as high as standard variable rates, which are the rates that banks and building societies normally charge only when borrowers come to the end of a special deal.

Although discounted variable rates have also increased, Mform says that they look better value.

HSBC has a two-year discounted rate of 5.69 per cent. On a £150,000 loan, the total cost over the two years would be £25,414, assuming interest rates do not change. That is £1,882 less than the £27,296 a homeowner with the same size mortgage would fork out on the best two-year fix, which is a 6.29 per cent deal with NatWest or RBS, fixed for 25 months, with an arrangement fee of £899.

The most competitive three-year discount is from the Woolwich, charging 5.89 per cent with no set-up fees. On a £150,000 loan, the cost would be £38,345 over the three years.

The most competitive fixed rate over the same period is a Halifax deal, fixed at 4.49 per cent for 13 months, then reverting to 7 per cent. It has set-up fees of £999 and would cost £39,821 over three years.

Another benefit of discounts is that they often have lower application and exit fees. This means that borrowers have the flexibility of switching to a fixed rate at minimal cost if better deals become available and the interest rate outlook changes.

HSBC's two-year discount has exit fees of 2 per cent in the first year and 1 per cent in the second. The three-year discount from Woolwich has an exit charge of only £275.