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24 Nov 2024
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Fixed rate mortgages unspun Moneyfacts.co.uk comments on the Liberal Democrats motion condemning high mortgage fees

Julia Harris mortgage analyst at Moneyfacts.co.uk comments as follows

“Whilst there is no doubt that fees have increased, particularly in the highly competitive two year fixed rate market (as highlighted by the table below), it is highly unlikely that a borrower will sign up for a mortgage without being aware of the amount of the lending fee as this will be clear to see as part of the Key Facts Illustration and be included in the mortgage offer.

“In cases where the impact of a low rate/high fee is questionable, Moneyfacts carries out internal true cost calculations to aid us in compiling our Best Buy tables. Furthermore true cost calculations are currently used and illustrated in the Daily Mail money section each Wednesday and we will be rolling this out to other media partners in the next few months.

“Whilst the motion states that fees have been increasing, this is certainly nothing new. This practice has been increasing over the last eighteen months, but now that we have started to see more percentage and four-figure fees, it has obviously become more apparent to consumers and those outside the mortgage industry.

“It is also of slight concern that the MPs in question may not appreciate that a low rate with high fee scenario can be beneficial to consumers taking out larger mortgages. Specifically the Halifax 1.99% deal attracts a higher fee to offset the low rate. It is also a product with an extended tie in, offering 1.99% for the first 16 months followed by 6.49% for the rest of the 48 months in the tie in. therefore can’t be compared on a like for like basis with standard fixed rate deals.”

 

Moneyfacts Best Buy deals 2 year Fixed rates February 2007
 


Lender

Rate

Date

Fee

LTV

Yorkshire BS

4.79%

30.4.09

1.50%

95%

Portman BS

5.12%

31.3.09

£999

95%

Halifax

5.19%

28.2.09

£999

85%

West Bromwich BS

5.19%

28.2.09

£895

95%

Moneyfacts Best Buy deals 2 year Fixed rates September 2006

 

Lender

Rate

Date

Fee

LTV

Yorkshire BS

4.79%

30.9.08

£595

95%

Nationwide BS

4.88%

2 years

£699

90%

Alliance & Leicester

4.89%

31.8.08

£499

95%

Portman BS

4.89%

30.9.08

£599

95%

 

NOTES TO EDITORS:

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

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