You are here: Home - News -

Over a third of mortgages are fee-free – Moneyfacts

by:
  • 23/07/2018
  • 0
Over a third of mortgages are fee-free – Moneyfacts
The number of fee-free mortgages have increased by 17% to 2,007 in July 2018, from 1,709 products this time last year, data showed.

 

Although mortgage rates are  relatively static, fee-free mortgages now represent 40% of the mortgage market, against 36% in July 2017 and 38% in January this year, according to the latest research from Moneyfacts.co.uk.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said the increase in the number of fee-free deals by 274 since the start of the year is great news for borrowers looking to keep costs down.

However, as the number of fee-free deals has increased, so too has the average fee, rising from £979 in May to £990 today.

Nelson added: “Providers have always used fees to compensate for a lower rate so, borrowers now must become wise to this tactic, particularly with more no-fee deals on the market.

“Many borrowers focus on achieving the cheapest possible deal, and while this should be admired, they may be missing out on offers that could be more cost-effective in the long run. For example, borrowers opting for the lowest two-year fixed rate deal at 75% loan-to-value would be £1,131.80 worse off compared to someone opting for the lowest deal without a fee.

“Ignoring the fee-free options on the market can be a costly mistake as fees can mount up, particularly if you remortgage multiple times over the lifetime of your mortgage.”

Fee-free deals do not mean borrowers will have no fees whatsoever to pay, as there are other costs such as valuation and legal fees to keep in mind, Nelson said.

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
We must recognise clients have different needs from their mortgage broker – Church

As part of its Mortgages Market Study interim report, the Financial Conduct Authority called for a better system for customers...

Close