Review mortgage set up costs before accepting a deal.

Mortgage rates are still historically cheap however mortgage set up fees are not, arrangement fees have significantly increased. Lenders squeezed by offering low headline rates have had to start making their profit elsewhere.

Mortgage arrangement fees, property valuations, surveys, exit fees, legal costs and stamp duty all add up to hefty charges which can unbalance any budget.

When reviewing a deal it is advisable to seek the expert guidance of a UK broker such as Deal Direct. We can carefully take you through any mortgage offer to work out exactly which is the most affordable deal longer term.

Headline rates are often eye catching but can come with some high fees which change how affordable the deal really is.

For example HSBC offer an eye catching low mortgage rate of 2.64% fixed for 2 years, the fee however is £1999. If worked out over the course of 24 months your repayments are actually around £84 more per month. This is a lump sum paid up front, but it is advisable to calculate all costs that are involved in setting up your mortgage and not just the rate charged.

Some lenders are setting arrangement fees as a percentage of the amount to be borrowed, anywhere from 1% up to 3%. This needs to be carefully reviewed and considered as you need to work out which is actually the cheapest loan, the one with a high fee and lower rates or a low fee and higher rates.

In general the larger the mortgage the less significant the fee, because the rate charged is much more important. For those taking out a large it may be worth paying a high fee for the very best rate, for those with a small mortgage the opposite is true.

Whatever your mortgage requirements Deal Direct can review your circumstances to find you the very best deal on offer.

Contact Deal Direct today.