According to Moneyfacts, product fees have increased to an average of £1,141, which is up from £1,095 in the same period last year and £1,073 in 2022.
The report continued that there were around 1,845 products with no product fee, equal to 35% of the deals in the fixed rate market, which is a decrease from 43% of the fixed rate market last year.
There were around 2,294 products with free or refunded legal fees, which accounts for 44% of deals in the fixed rate market. This is roughly in line with figures from the prior year at 45%, but is down from 49% in 2022.
Deals with a free or refunded valuation came to 3,857, around 73% of the fixed rate mortgage market. This compares to 75% in 2023 and 72% in 2022.
Cashback products made up a quarter of fixed products in 2024, equivalent to 1,320 products. This is a fall from 34% in 2023 and 29% in 2022.
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The average rate for deals with a fee came to 5.94% in 2024, up from 5.48% last year and 3.2% in 2022.
The average rate for products with no fee stood at 5.77%, a rise from 5.59% in 2023 and 2.93% in 2022.
Borrowers should be aware of ‘true cost of any mortgage’ regarding mortgage fees
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said borrowers worried about rising fixed mortgage rates “would be wise not to rush when comparing deals and ensure they consider the overall true cost package, as the average mortgage fee has crept up”.
She said: “There is an abundance of deals to suit different needs – some may be headline-grabbing rates, but these can also charge a high upfront fee. The best mortgage will come down to how much someone needs to borrow and for how long, so seeking independent advice to crunch the numbers is wise.
“Those borrowers looking to remortgage right now will find some of the lowest rates will cost them more than £1,000 in a product fee, but a mortgage with a slightly higher initial fixed rate and lower product fee could be a better package based on true cost.”
Springall said that mortgage interest rates were still volatile, and that may be the case for the next few weeks.
“However, even if borrowers lock into a rate that’s slightly higher than what may have been available a few weeks ago, borrowers could still get an attractive package by finding a deal that has some cost-saving incentives, a reasonable product fee, or no fee, and maybe even cashback.
“It would also be more cost-effective to move off a standard variable rate (SVR) and onto a fixed deal, based on average rates. First-time buyers might need to save on the upfront cost of their deal or opt for a mortgage that comes with a bundle of incentives, such as cashback. These packages may be more suitable if new buyers have exhausted all their savings on a deposit, removal and furnishing costs,” she added.
Springall said that most fixed rate mortgages would offer borrowers a free or refunded valuation incentive, and just under half of all fixed deals will cover legal fees.
Over a third do not charge a product fee, and some lenders allow borrowers to add it to the mortgage advance.
“These options can save borrowers on the upfront cost of their deal, but it’s vital to be conscious of the true cost of any mortgage before they apply,” she noted.