With the third hike in six months, there is an outside chance that interest rates could climb by half a percent this time around, as countries across the EU struggle to contain rising inflation.

Nobody can be sure of the rate rise until the European Central Bank announces its decision at lunchtime on Thursday.

The impact of creeping interest rates has been fairly muted until now, with the payments on a 20-year, 200,000 mortgage increasing by about 50 a month between November and April.

If the ECB opts for another quarter-point hike this week, however, this would push the average standard variable mortgage rate to about 4.25% and add another 30 a month to your household bills.

And there is more to come, with the steady drip-drip of interest rate hikes expected to continue over the next year.

None of the individual rises are likely to break the bank on their own. Taken together, though, they will place a growing strain on your budget.

Now is the time to do something about it. By managing your mortgage, juggling loans and lenders to find the product that suits you best, you can save yourself a fortune in interest and even pay off the mortgage early.

You can expect to pay at least 1,000 in legal fees if you have to move lenders, although, if you play your cards right, your mortgage broker or the new lender might pick up the tab. If not, you should quickly recoup the cost through the interest savings on a cheaper mortgage.

Here are five ideas to get you started:

1) Fix: The best way to cope with trouble ahead is to lock into a fixed rate before the interest hikes begin to bite.

National Irish Bank increased its rates on Thursday but is probably still your best bet at 4.15% fixed for two years or 4.18% fixed for three years. This is just fractionally more than the 4% interest that many home owners already pay on variable rate mortgages, so they would be quids in by switching to NIB even with a fractional rise in interest rates.

The trouble with fixed rates is that they limit your room for manoeuvre. If the ECB fails to move as expected . . . and trying to predict interest rate swings is a mug's game . . . you risk paying over the odds for your mortgage.

Breaking out of a dud fixed rate mortgage can also be tricky, because the bank is likely to hit you with hefty penalties for early redemption.

2) Mix and Match: Play it safe by fixing part of your mortgage while leaving the rest on a variable rate.

If you make a bad call . . . by fixing at a rate of interest that proves to be too high, for example . . . you will at least have the consolation of knowing that only part of the mortgage has been hit.

The option of putting different parts of your mortgage on different rates of interest is offered by a growing number of lenders. But remember, there is a price to be paid for hedging your bets and, by fixing any portion of the mortgage, you will be sacrificing flexibility.

3) Interest-Only: The panacea for the deeply indebted, interest-only mortgages can slash your monthly outgoings.

This is because you are not actually repaying any of your debt, just the interest charges incurred on top.

The savings can be impressive. The payments on a normal 250,000 loan paid over 20 years work out at 1,515 a month, assuming a 4% rate of interest. Switch to interestonly and this drops to 833, a saving of 682 a month.

Lenders are increasingly willing to lend on this basis for periods of three to five years, while Bank of Scotland allows interest-only for the entire term of the mortgage.

This can be a fool's paradise, however As long as you only pay interest, the mortgage remains stuck at the original amount borrowed.

It also works out a lot more expensive in the longer term.

The interest bill on a normal 250,000 mortgage works out at 113,600 over 20 years at 4% interest. On an interestonly basis, this jumps to 200,000 . . . and, at the end of year 20, you still have to find 250,000 from somewhere to pay back the money you have borrowed.

Interest-only is a quick-fix to get you out of a temporary cash crisis, not a back door to a cheap mortgage.

4) Spread the Pain: The easiest way to take the sting out of higher interest rates is to spread the mortgage over a longer term.

Another quarter-point interest rise by the ECB, on top of the two previous hikes, would add about 80 to the monthly payments on a 200,000 mortgage since last November.

Extending the mortgage term by just two years would solve the headache in one go, bringing the payments back to the level they were at before interest rates began to rise.

As always, there is no gain without some pain. Sticking with the original term gives a total interest bill of 97,230 over 20 years, assuming a rate of 4.25%. Adding an extra two years adds more than 10,000 to the total bill.

5) Track the Savings: If your mortgage is more than three years old, the chances are that you are paying too much interest. Standard variable rates, a real money maker for the banks, typically charge 1.5% over the base rate set by the ECB. This is what many people end up paying when the introductory discounts, which the banks used to win their business, run out.

But newer-style tracker mortgages, which shadow the ECB by a tighter margin of around 1%, provide a much cheaper alternative.

"The savings can add up to 200 per month or 2,400 per year, " according to Peter Bastable, managing director of Simple Mortgages, a home loans broker. "Tracker mortgages are becoming an increasingly attractive option for borrowers as interest rates rise."

Back in November, you would have paid 2,511 a month on a 500,000 standard variable rate mortgage paid over 25 years. This has now risen to 2,647 a month, even before factoring in this week's expected rate hike.

"By switching to a tracker product with the same lender, you could be paying 2,436 per month, " said Bastable.

"This represents a saving of 211 per month or 2,532 per year.

"You would, in fact, be paying less that you were paying in November . . . despite the two interest rate increases in the intervening period."

Beware the chancers targeting investors overseas

PEOPLE living abroad are being targeted by unscrupulous financial advisers for risky investment schemes and fraud. Many pensioners aiming to live out their days in the sun are in danger of being defrauded of their savings, regulators and campaigners warn.

One expat group in Spain, weary of its community being repeatedly fleeced, has now posted warnings of 40 different investment scams on www. costa-action. co. uk.

Meanwhile, Spain's "nancial regulator is investigating 17,000 complaints of mis-selling. Many of the investment operations targeting expatriates there claim to be based and regulated in offshore jurisdictions, such as Gibraltar.

Some are not registered at all and, in recent weeks, the Gibraltar Financial Services Commission issued a strong warning against an outfit run by British financial advisers in Spain, the latest in a long line of suspect firms.

The Commission urges investors to "exercise the greatest possible caution before proceeding" with any advisers. The golden rule is, "If it sounds too good to be true, it probably is."

Expatriates are ideal targets for chancers and conmen, warns David Marchant, publisher of the Miami-based magazine Offshore Alert. "A typical expat is financially successful. Also, being strangers in a foreign land, expats tend to work and socialise together, forming a group. . . that is easy for conmen to recognise and infiltrate."

Many expats are elderly and more vulnerable to sharp practice by fraudsters based in offshore havens or countries with little or no financial regulation. Another concern is that expats like to keep their money offshore to avoid paying tax at home, and this can leave their savings much more vulnerable than they would be in well-regulated jurisdictions.

Many of the basic safeguards that protect clients of financial advisers in the UK, and in Ireland, do not exist overseas, says William Ellerton of solicitors Bevans.

"Financial advisers operating abroad are not bound by [the same] regulations, which require that they fully understand the investor's risk pro"le and investment objectives. This lack of regulation can lead to some appalling cases of mis-selling, particularly where advisers are chasing generous commission payments from the funds."

If investors suffer losses, their only recourse might be to sue the adviser in the country where the guidance was given. "However, where that adviser is unregulated and frequently uninsured, there may be little purpose to this."

The English-language Sur newspaper in Spain reported a recent incident of advisers targeting expats from the Costa del Sol through to Barcelona.

Prospective clients were offered a return of up to 16% on their capital.

It transpired that the advisers involved were not on the register of the Spanish regulator, the National Investment Market Commission.

So far, on the Costa del Sol, 700 families are said to have lost a total of 100m to these fraudsters.

The Costa del Sol Action Group was formed to bring claims to the Spanish courts and, in the 100m case mentioned above, lawyers for the victims are now pressing criminal charges against the financial intermediaries.

But Gwilym Rhys-Jones, an expat investigating frauds for the action group, warns: "There is no proper system of regulation of "nancial advisers in Spain."

All experts say that investors should always use independent "nancial advisers, and funds that are reputable and regulated in a country with strong protection for investors.