Mortgage costs rise after a sharp increase in arrangement fees.

Home-buyers are being hit by both increased mortgage rates and sharply rising mortgage arrangement fees.

There are cheap headline rates on offer but these eye catching deals often come with hefty mortgage arrangement fees. Would-be buyers are being warned that mortgage fees as well as rates are on the up.

Fee have increased by over 70% in the last three years and now play as an important a role in the affordability of a mortgage deal as the headline rate.

The lowest rate products which often come with the highest fees, do not necessarily offer a buyer the best value. In fact over the full mortgage term a higher rate lower fee product could work out more cost effective.

Trying to work out which deal offers the best value in real terms can be difficult to decide. Just fixing on the rate while neglecting to factor in arrangement costs is a mistake you could come to regret.

You are therefore advised to contact independent broker Deal Direct to undertake a mortgage market comparison to your behalf, we will source the best value mortgage products on offer.

For example HSBC currently offer a 2 year fix at 2.64% which comes with a high fee of £1,999. Over 2 years on a £150,000 mortgage a total of £18,404.20 would need to be repaid.Comparing this to a Bank of Ireland 2 year fix at a higher 2.78% with a lower £799 fee, for the same loan value a total of £17,461.48 would be repaid. This illustrates how important it is to consider all factors when calculating mortgage affordability.

Working out which is actually the cheapest offer over a mortgage term can be complex and is therefore best done by an expert adviser at Deal Direct.

We are a 'whole of market' broker with access to the entire UK mortgage market, and can source the most competitive deal on offer.

For an up to date mortgage comparison of all lenders offers,

including some which aren't advertised on line,

contact Deal Direct today.