Fixed mortgage rates remain volatile, and now the average fee charged on fixed deals has risen.
This is according to the latest analysis by Moneyfactscompare.co.uk reveals the changing landscape of costs and incentives across the fixed mortgage market.
Mortgage product fees have risen on average. At £1,141, the average fee currently charged on a fixed rate mortgage deal (not including no-fee products) has risen by £46 since March 2023.
The proportion of the market offering fixed rate mortgage deals that offer a free or refunded valuation incentive has fallen to 73%, from 75% at the start of March 2023.
The percentage of the market offering fixed rate mortgage deals that offer a free or refunded legal fees incentive has fallen to 44%, from 45% at the start of March 2023.
The proportion of the market offering cashback has dropped by 9% since March 2023.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said: “Borrowers concerned about rising fixed mortgage rates would be wise not to rush when comparing deals and ensure they consider the overall true cost package, as the average mortgage fee has crept up. There is an abundance of deals to suit different needs, some may be headline-grabbing rates, but these can also charge a high upfront fee”.
She adds: “Mortgage interest rates remain volatile, and this may well be the case for the next few weeks. However, even if borrowers lock into a rate that’s slightly higher than what may have been available a few weeks ago, borrowers could still get an attractive package by finding a deal that has some cost-saving incentives, a reasonable product fee, or no fee, and maybe even cashback. It would also be more cost-effective to move off a standard variable rate and onto a fixed deal, based on average rates”.
Springall pointed out that just over a third of fixed mortgages on the market do not charge a product fee, and on those deals that do charge a fee, some lenders can allow borrowers to add it to the mortgage advance.
