Since June 2012, the mortgage market has seen a significant increase in fixed and tracker rate mortgage deals being offered, and at record low interest rates. However, according to the price comparison website Moneysupermarket.com, the falling interest rates have come at a cost of increasing fees.
The number of two and five year fixed rate products on the market has risen by 138% and 51% respectively, thus providing an ever increasing choice for those who have a sufficient deposit. At the same time, the average product fee charged by lenders has increased by 30% for two year deals and 22% on five year products.
In order to find the best fixed rate mortgage deal, it has been advised by Clare Francis, mortgage expert at Moneysupermarket.com, that would-be applicants work out the exact saving they should expect to make. While an initial rate might look attractively low, if the fee is very high, it could be more expensive in the long term than a higher rate and lower fee.
Moreover, some people may be likely to fall victim to this, as ‘2 and 5 year fixed rate deals are currently at an all-time low’ yet some fees are increasing. Finding the right deal for each would-be buyer may require additional research, but could ultimately save them significant amounts of money.