Building society mortgage fees £700 cheaper than banks
Research looking at two-year fixed rate mortgages found that building societies were able to offer an average rate of 4.15%, compared to the 4.22% offered by banks.
When added to arrangement, booking and completion fees, the study said that using a bank could cost consumers £700 more over the mortgage term.
For five-year fixed rate products, banks were able to price their products cheaper than mutuals, with an average 4.62% compared to 4.68%. But when fees were taken into account, building societies are still £209 cheaper on average.
But banks tend to prove the better option for first-time buyers, the report said, with big banks able to offer lower up-front fees compared to building societies.
Clare Francis, mortgage expert at MoneySupermarket.com, said: “When looking for a mortgage, don’t just go to the big banks as there are some great deals available from smaller lenders too and it’s really important to get the best product as it could literally mean the difference in cost of thousands of pounds.
“What’s more, the deal with the lowest rate of interest won’t necessarily work out to be the cheapest. This is because set up fees can have a significant impact on the overall cost of a mortgage and they vary considerably.