You are here: Home - Mortgages -

Mortgage rates and fees both rising

0
Written by: Lana Clements
25/08/2020
Mortgage rates have edged up from record low levels in July, while product fees have been increasing since the start of June, according to analysis by Moneyfacts.

The average fee has increased by £48 in just two months, Moneyfacts found.

At the same time, typical rates have increased on deals with and without a fee by 0.25% and 0.33% respectively since July.

The amount of deals that offer a cashback incentive has also dropped by 5% to 27% of the market over the past month.

As product availability continues to be an issue for the market, now could be a good time for borrowers to lock into deals, according to Moneyfacts.

Eleanor Williams, spokesperson for Moneyfacts, said: “With the UK having entered a recession, and concerns around employment and income growing, locking into a fixed rate mortgage deal could provide a household with security from potential interest rate increases, and stability with the ability to budget to a predictable monthly payment during a time of economic uncertainty.

“While fixed rates remain lower than pre-pandemic levels, there may be mortgage borrowers who want to take advantage and secure a new deal but are hesitating due to concerns around needing to cover additional expenses, such as paying a product fee or having to meet other set-up costs like conveyancing fees or valuation expenses.

“The average rate charged on fixed rate deals that carry a fee is only 0.07% lower than the average rate on fixed rate products that do not charge a fee, and the proportion of the fixed rate market where no fee is payable remains stable at around 40%.

“Therefore, despite the significant contraction in product availability overall in the mortgage sector, lenders are still providing fee-free deals. Even with a slightly higher average fixed rate, no-fee deals could work out more cost-effective in the long-term.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
interest rates
Household income and spending both fell during Covid-19

A Bank of England survey of British households has pointed to large declines in household income and spending due to...

Close