Selling
Fee Free Mortgages
Posted on: Friday, February 24, 2017
Increased competition between lenders has seen the number of fee-free fixed rate mortgages more than double over the past twelve months.
According to recent data from Moneyfacts, there were 556 fee-free deals just over a year ago, compared to 1,162 by the end of 2016.
Although the number of fee-free deals has increased, average fixed rate fees have gone up by £30 from £954 to £984 over the past year. The average two-year fixed rate, however, has fallen from 2.67% to 2.34% in the last 12 months, which suggests some lenders are introducing lower rates but with higher fees.
Fee-free mortgages usually have slightly higher rates than those which do charge a fee, but they often still work out to be more cost-effective overall once fees are factored in.
Calculations show that borrowers with a 25% deposit opting for the lowest two-year fixed rate deal with a fee could be more than £1,000 worse off than if they’d gone for a deal with no fee.
It’s important that when comparing deals, borrowers always look at the total cost, rather than just the headline rate of interest charged.
Read What Our
Customers Say
How Much is Your Property Worth?
Not sure how much your property is worth? Request a free, no obligation valuation for your property.
Book a Valuation