Is the best mortgage deal a low rate with high fees?
Low rates may not offer the best mortgage deal if your loan is small and the fees are high.
Recently published figures suggest that over the last 3 years, the average mortgage fees have risen by around 70% but higher fees do not always outweigh the benefit of lower rates. For a true comparison of mortgage costs call Deal Direct for advice and the most competitive products in the market.
The biggest impact of fees is on smaller loans because the proportional increase in overall costs is much higher. Working out the total cost is the only way to check if a lower rate with a higher fee or a higher rate with a lower fee is the cheapest option.
At Deal Direct we are seeing lenders offering special deals with no arrangement fees, sometimes an offer with higher rates and no fee can still be the best mortgage deal. For example over two years a rate of 2.64 % with a £2,000 fee would be more expensive than a 3.49% rate with no fee, if you have a loan of less than £100,000.
If you are looking for a mortgage in excess of £300,000, the rates offered are often better with deals that have fees attached. Due to the higher loan value the addition of fees has less impact on the overall costs. This can also be the case for longer term loans.
To ensure that you get best mortgage deal get expert advice. At Deal Direct we have access to whole of market lending and our experienced advisers are constantly comparing the real costs of mortgage products to find you the best offers.
Contact Deal Direct today.
