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Fees rocket as mortgage rates hit record low

  • 13/02/2013
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Fees rocket as mortgage rates hit record low
Mortgage rates may have hit an all-time low but fees are on the rise, according to

It found the number of products on the market has also increased by 37% since last summer but pointed to a sinister trend when it comes to the fees charged on mortgages.

The average application fee for fixed rate deals is up 17% and for tracker products up 9% since last August.

Looking at fixed rates in more detail, moneysupermarket revealed that, since June 2012, the number of two-year fixed deals on offer has soared by 138%, while the average interest rate charged has come down by 0.89% to a low of 3.56%.

The number of five-year fixed rate mortgages has increased by 51%, while the average rate has dropped 0.70% in the same period.

However, application fees on two-year fixed rate mortgages have risen by 30% in that time, to an average of £1,033, while five-year fees have increased by 22% to an average of £883.

Clare Francis of said: “It’s very easy to be attracted by low headline rates when looking at mortgages, but you must also factor in the fees you’ll be charged to take the mortgage out.

“Set-up costs can vary greatly between providers so taking the time to work out the total amount you have to repay over the term of the offer is essential.

“When comparing mortgages you should always look at the total amount you would repay, including fees, over the term of the deal.”


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