For the next four months Times Money will follow three families as they attempt to remortgage. The Annings, Pollards and Bohoruns are all approaching the end of low-rate fixed or discounted deals and are anxious to avoid a huge leap in their monthly repayments.

Since taking out their current deals, house prices in many parts of the country have plummeted and lenders have introduced stricter rules, much higher interest rates and more expensive arrangement fees.

The impact on ordinary families could be dramatic and Melanie Bien, of Savills Private Finance, the mortgage broker, says: “Even those on relatively good incomes are finding it harder to remortgage.

“Borrowers who have taken on a big mortgage to purchase a sizeable family home may find that falling house prices mean that increased loan-to-value (LTV) ratios are playing havoc with their ability to secure a new deal.”

The three families who have volunteered for our remortgage challenge face increases that will add thousands of pounds to their mortgage bills.

Here is the first instalment of their remortgage diaries. We will come back to them in a month's time to see how their search has progressed.

The Anning family

Since the Annings took out their current loan, Lisa has given up work and Jim has become self-employed.

Remortgage dilemma: “Will lenders view us differently now that our employment status has changed and our income is less stable?”

Lisa and Jim Anning, of Reading, Berkshire, have spent the past two years refurbishing their five-bedroom semi-detached period home. The couple, pictured with their sons, Zak, 19 months, and Joel, 4, bought the property for £385,000 in 2006. They took out a £150,000 mortgage from Britannia over 20 years. The deal, a two-year fix pegged at 0.1 percentage points below the base rate, will increase to 1.5 points above base in November, which would take their monthly repayments from £850 to more than £1,000. To help when they come to remortgage, the couple recently paid off an extra £10,000, which will reduce their current repayments to £760 a month.

The biggest obstacle will be their change of employment status. Lisa has given up work as a manager at the BBC to become a full-time mother, while Jim has become a self-employed consultant. Lisa says: “We are anxious about remortgaging, given our change in circumstances. It is hard to tell what has happened to our income because it is now so unsteady. We can no longer go to lenders with proof of what we earn.”

Lisa thinks that the home improvements have lifted the property's value to about £500,000. They want to reduce the mortgage term to about seven years and have £10,000 in savings that they would consider offsetting.

The Pollard family

The Pollards' existing mortgage is a sub-prime, self-certification loan. This kind of deal has virtually disappeared in the credit crunch. Steve also has a buy-to-let investment, another area of the mortgage market that has taken a big hit.

Remortgage dilemma: “Will lenders view me as a prime borrower three years on, now that I am employed, or am I still an unsafe bet in their eyes?”

Steve and Taz Pollard, of North Devon, live in a two-bedroom semi-detached property with their two-year-old daughter, India. They bought the house in 2002 for £100,000 with a £100,000 self-certified near-prime deal from Oakwood Homeloans, at 5.9 per cent. Their interest-only monthly repayments are £500.

Rates for a similar deal now are approaching 8 per cent, but at the time that the Pollards took out the loan, Steve, a software engineer, was self-employed and unable to prove his income. With Steve's new job, which he started in February, they now have about £200 of additional disposable income each month, which they would like to use to repay some of the capital. Steve has spoken to a broker, who told him that he would probably be able to get a prime loan this time. Ideally, Steve would like to switch lender and would consider offsetting £25,000 of savings against the loan.

The £50,000 buy-to-let deal, on a studio flat in North Devon, is also interest-only and comes to an end in September. They are currently paying 5.35 per cent with Bristol & West, but Steve is worried that they will be trapped for longer because he took out a further advance this year and is tied into this by early repayment charges until 2010.

Steve says: “We are hoping that we will be able to get roughly the same interest rate as before and use our extra income to pay off capital.”

The Bohorun family

With a £146,000 loan and a property value of about £200,000, it is touch and go whether the Bohoruns will be able to secure the most competitive rates available. It will all depend on the lender's valuation of their four-bedroom new-build detached home.

Remortgage dilemma: “Should we hold out for better rates?”

Prakash and Alka Bohorun, of Pontefract, Yorkshire, bought their four-bedroom new-build property three years ago for £166,000. The couple, pictured with their children, Dia, 14 months, and Nishta, 2, have a three-year fixed rate of 4.39 per cent from Cheltenham & Gloucester.

However, a best-buy three-year fix is now 6.39 per cent, with a booking fee of about £1,000, so the Bohoruns would face a steep increase of £865 a month for a similar deal. So, Prakash, an accountant, is keen to take out a tracker. He has been holding out for better rates but their current deal expires at the end of August. He has rung Lloyds TSB and HSBC to ask them to look out for a good deal and he is researching on the internet.

The experts' choice

In the choice between fixed and variable-rate mortgages, there is currently no competition - the latter win out, experts claimed this week.

Fixed rates, traditionally the low-cost secure choice for homeowners, have risen sharply to become thousands of pounds more expensive than equivalent tracker deals, according to mform.co.uk, the mortgage website.

The reason is that fixes are governed by swap rates, the money markets that have been thrown into turmoil by the credit crunch. Variable rates, on the other hand, are set at the lender's discretion.

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. This is £1,882 less than the best two-year fixed rate on the market, a 6.29 per cent deal with NatWest or RBS, which would cost £27,296 on the same size loan.

However, brokers recommend that borrowers wanting security should choose a fix if they can afford the repayments.