Jump to main content of pageaccessibility informationSitemap
18 Oct 2019

News

Beware the true cost of new mortgage deals

Darren Cook, mortgage expert at Moneyfacts.co.uk comments:

“In recent weeks many lenders have announced cuts in their mortgage rates, leading to many people predicting that we may have turned that corner. The average rate on a two-year fixed rate mortgage has dropped from 7.08% at its peak on 11 July to 6.90% today, but typically there is a sting in the tail.

“During the last month the average fee has increased by nearly £100, meaning that borrowers have not benefitted as much from a reduction as expected.

 

 

Average 2 year fixed rate

Average 2 year fixed fee

True cost over 2 years on a £150K mortgage

6 August 2008

6.90%

£1,023

£26,237.88

4 July 2008

7.05%

£926

£26,485.04

Change

-0.15%

+£97

-£247.16

Source: Moneyfacts.co.uk 6.8.08

 

“On a £150K repayment mortgage, a £100 increase in fee equates to an additional 0.06% increase in the rate. Therefore, in real terms a customer has only benefitted from a net 0.09% reduction in the average rate, as opposed to the full 0.15%.

“Research conducted by Moneyfacts.co.uk has shown that some lenders have increased rates and fees and not brought either back down. Other lenders have reduced rates but increased fees; some lenders have switched from charging a fixed monetary fee to offering a percentage fee.

“On a positive note, swap rates have continued to fall and are now at their lowest level since 13 April. Predictions are that we should see further decreases in fixed rates from high street lenders before too long.

“It is imperative that anyone looking for a new mortgage deal makes sure they consider the true cost of the deal and not just look at the headline rate being offered.”

 

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

Remortgages | Mortgage Repayment Guide Remortgage Guide | Life Insurance | Mortgage Protection Life Insurance | Decreasing Term Life Insurance | Accident Sickness Unemployment | Accident Sickness Unemployment Cover | Builds and contents quote | Conveyancing Online | Btl Mortgage | Mortgage Repayment Calculator | Free Mortgage Advice | Online Mortgage Application | Shared ownership mortgages | Site Map