Cost of mortgages rise, with both rates and fees up
Average mortgage fees on fixed rate mortgages have risen over the last year, according to Moneyfacts.
The financial information provider said that mortgage fees rose £57 in the last year to reach a current average of £1,075.
There are still fee-free mortgages available, but the proportion of the market offering fixed rate mortgage deals that do not charge a fee has reduced from 40% in June 2020 to 35% at the start of this month.
Mortgage rates up
Average rates have also increased year on year. Fixed mortgage deals, both with and without a fee, have increased by 0.65% and 0.55% respectively to 3.08% and 2.87%.
Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “Borrowers may be disappointed to see that average fixed rates have continued to rise of late, but overall, this may be attributable to the return of traditionally higher rated, higher loan-to-value (LTV) products.
“It is a pleasant surprise to see stability over the past two years in the proportion of fixed deals that offer incentives, which may suggest lenders are still working hard to offer an array of products to entice customers. Therefore, despite increases to rates and fees alike, there are clearly still great deals out there for borrowers to consider. These changes strengthen the need for borrowers to secure the support and advice of a qualified broker who can help to assess the true cost of a deal, carefully looking into whether or not it is beneficial to pay a fee or to stomach a slightly higher initial rate and consider what, if any, incentives may be important for their customer.”