Homebuyers warned of increasing mortgage application fees
Figures from price comparison site, moneysupermarket.com, have shown an increase of 20 per cent in both fixed rate and tracker mortgage fees since September 2009.
The news has encouraged customers to consider the overall cost of the mortgage including its accompanying fees rather than be lured by the lowest headline rate. Failure to do so could see them paying more in the long term as the figure below highlight.
|Mortgage||Rate||Fee||Amount borrowed||Total paid back over two years|
|2 year fixed rate||2.64%||£1999||£150,000||£18,404.20|
|2 year fixed rate||2.78%||£799||£150,000||£17,461.48|
While there is a difference of 0.14 per cent in the rate, a customer would actually save £942.72 by opting for the higher rate mortgage.
Clare Francis is the mortgage expert at the UK comparison site:
“It’s very easy for borrowers looking for a new mortgage to be attracted by low headline rates; however it is vital to consider the account arrangement and booking fees as part of the overall cost. Fee 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.”
Content correct at time of publication