Fees on fixed rate Mortgages have shot up in recent months. The cost of many fixed rate mortgage deals have increased by nearly 55%. Application fees on variable mortgages have increased, but, at a slower rate. Research by mform.co.uk suggest that best-buy discounted rate mortgages only increased 11%.
The shorter the mortgage, the bigger application fees will be as a % of the total mortgage. If you have a small mortgage, which you hope to pay off quickly, avoid paying high application fees.
It also shows that when choosing a mortgage application fees can be as important as the basic interest rate for determining competitiveness.
Mortgage firms have been happy to increase application fees to ration mortgage lending. The market is becoming increasingly uncompetitive with potential lenders being in an unenviable position of facing high costs and difficulty in getting loans.
Check out a variety of mortgage lenders because often the biggest mortgage lenders are not the most competitive.
Fixed Rate Mortgages.
Fixed rate mortgages are also not great value because with impending economic downturn, interest rates are unlikely to rise.