While the average fixed-rate mortgage fee has increased, the proportion of deals that offer benefits such as free legal fees or cashback is decreasing, according to the financial information website.
Moneyfactcompare.co.uk found that, excluding no-fee products, the average product fee currently charged on fixed-rate mortgages has increased by £46 since March 2023, reaching £1,141.
According to the website, more than a third (35%) of fixed rate deals do not charge a product fee. This is a decrease from 43% in early March last year.
The proportion of fixed-rate mortgage deals in the market offering free or money-back assessments has fallen from 75% to 73% at the start of March 2023.
The proportion of fixed-rate mortgage deals with free or refunded legal fees fell to 44% from 45% a year ago.
A quarter (25%) of fixed-rate mortgages offer cashback, down from a third (34%) in March 2023.
However, while the percentage of fixed-rate mortgages on the market that offer certain benefits has decreased over the past year, the number of fixed-rate mortgages available generally has increased. A general increase in the number of deals available means an increase in the number of deals offering perks.
For example, while the proportion of zero-product-fee fixed-rate mortgages on the market has decreased, the number of zero-product-fee mortgages has increased from 1,551 (equivalent to 43% of fixed-rate) at the beginning of March 2023. The interest rate market at the time) was 1,845 (equivalent to 35% of the current market).
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 to consider the overall true cost package as average mortgage fees have risen. .
“There are many deals to suit different needs. Some may have headline-grabbing prices, but others may charge high upfront fees.”
She continued: “Borrowers looking to remortgage now will find that some of the lowest rates require them to pay more than £1,000 in product fees. However, a mortgage that offers a slightly higher initial fixed interest rate and lower product fees may be a better package. Based on actual cost.
“Mortgage rates remain volatile and this may remain the case in the coming weeks. But even if borrowers are stuck with rates that are slightly higher than what was available a few weeks ago, borrowers can still get an attractive package by finding cost-saving incentives, reasonable product fees, or no-fee deals. , and maybe even get cashback.”
Ms Springall added: “First-time buyers may need to choose a mortgage that saves on upfront costs or comes with a bundle of incentives such as cashback. If a new buyer has exhausted all savings on deposit, demolition and furniture costs, these packages may be more suitable.”