New research from a leading comparison website has found that the fees on tracker and fixed rate mortgages have increased sharply over the last 20 months. Fees on mortgage and remortgage deals have risen by 13 per cent since September 2009 as lenders look to increase their revenues from fees.
Mortgage Fees up 13 per cent in 20 months
When comparing deals on mortgages and remortgages it is vital that you take fees into account as well as the interest rate being charged. Sometimes it is actually beneficial to take a higher rate deal with a lower fee as it may save you money over the period of your deal.
Clare Francis from the website that conducted the research said: “When looking for a new mortgage, it’s easy to be lured in by low headline rates, however it is vital borrowers take into account arrangement and booking fees as part of the overall cost.”
Consider deals with no upfront fees
Many mortgage products – particularly fixed rates – now attract arrangement fees of up to £1,000. However, there are plenty of deals in the marketplace that don’t charge exorbitant fees.
The Daily Telegraph recently highlighted a number of lenders who have competitive deals that don’t carry substantial booking or arrangement fees. For example, the newspaper highlights the tracker deal from HSBC at 1.89 per cent above Bank of England Base rate for the lifetime of the mortgage. Available to 60 per cent ‘loan to value’ this has no upfront fee and no early repayment charges.
In addition, the Daily Telegraph highlights a deal from ING Direct which offers a five year fixed rate at 4.49 per cent. Available to 60 per cent ‘loan to value’ this has no arrangement fee and also has a remortgage package, offering a free valuation and free legal fees to remortgage customers.