The battle to get on the property ladder has become even harder after borrowers have been warned about inflated mortgage fees, as competition rages on regarding interest rate prices.
The competition for mortgage lenders is growing fiercer by the week – with some of the lowest rates on record, particularly on fixed rate home loans.
Despite the bottom rate deals available, lenders are looking to make up on lost revenue by finding other ways to boost their bottom line.
According to the latest research, fixed rate mortgages are now at their highest levels since August 2013. Arrangement costs are now way past the £1,000 mark.
“Some of the lowest deals on the market have fees of around £2,000, and some borrowers are being asked for even more,” warns Charlotte Nelson, finance specialist at moneyfacts.co.uk speaking to independent.co.uk.
“The largest fee on a fixed rate mortgage is sitting just shy of £4,000 on a deal for professionals only. As fees vary wildly even within just one provider’s mortgage range, it leaves many borrowers questioning what they are for and what they would gain from paying extra in fees.
“It seems wasteful when there are fee-free products out there,” Nelson adds. “That said, a low rate with a high fee does tend to favour those borrowers purchasing properties at the higher end of the housing market, so the advantages of a fee-paying versus a fee-free product will depend on personal circumstances.
Which means that while mortgage lenders tempt buyers with low rates on deals, it could mean they are adding the costs onto other fees. So is now is the best time to bag a great mortgage deal? Research the fine print to your mortgage agreement and make sure you account for all fees being charged, or that seemingly cheap offer may actually be quite misleading.