Low Fee Mortgage Deals in 2011

Low Fee Mortgage Deals in 2011

by Rebecca Hall on 30 Mar, 2011

Average mortgage fees have stayed remained fairly consistent over the last couple of years, sticking at around £1,000 for arrangement. However, there has been plenty of variation either side of that mean, and it’s these that savvy mortgage hunters need to pay attention to.

As mortgage lenders were desperate to attract customers during the darkest days of the crisis, many low fee and even no fee packages appeared on the market. The trend for these is dying down now as customers tend to be attracted more by a low fixed rate in an attempt to take advantage of the historically low base rate, than they are by cheap arrangement fees.

This has introduced a simple trade off to the mortgage market. Broadly speaking, low fixed rates come with high fees (some as high as £2,000), and variable rates come with low fees. How much the arrangement fee affects you will depend on how much cash you have now, but you could save a significant amount by stumping up the extra capital up front in order to fix at a low interest rate. Analysts predict the Bank of England will be putting rates up fairly soon, if not in 2011 then almost certainly in 2012, so now is definitely the time to get a fixed rate.

However, for those that just can’t afford the higher fees, or for whom higher fees negate the value of the lower rate, these are the market leading low fee mortgage deals (5 year fixed rate based on a loan of £150,000).

Bear in mind that what the best deal is for you will entirely depend on your individual circumstances, so make sure you shop around, speak to an advisor, and have a full knowledge of the terms and conditions before you sign up to anything.

About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.