Average fixed-rate mortgage deals drop by 17%
Research from the Nottingham Building Society has revealed that the average fee on a typical fixed rate mortgage has fallen by up to 17% in the last six months.
Reduction
Analysis from the report shows that the average fees are now £711 and as a result have fallen £149 from November 2014, when they stood at £860. On the other hand, buyers choosing variable rate mortgages have not benefited as much, with average fees at £719, in comparison to £727 six months ago.[1]
It was also revealed that between November 2011 and 2014, average fees for best buy fixed rate and variable rate mortgages increased by 20% and 10% respectively.[1]
Mortgage brokers suggest that fees may rise substantially over the next two years, according to further data from the report. 30% believe that fees will increase during this period, with just 12% predicting further falls. Pressure on rates and decreased competition among lenders have led 23% of brokers to suggest rates will increase in the next six months.[1]
Average fixed-rate mortgage deals drop by 17%
Shop around
Ian Gibbons, Nottingham Mortgage Services Senior Mortgage Broking Manager, said that, ‘whatever happens to mortgage rates and fees, there are so many products to choose from if you shop around and receive the right advice, you can still find a really competitive deal that meets your specific needs.[1]
He went on to say that, ‘our research shows that there are now 4,139 residential mortgages on the market, compared to 4,020 in November last year, and 3,027 in November 2011. So, in just over three years the number of residential mortgages on the market has increased by around 37%.’[1]
Concluding, Mr Gibbons said, ‘In order to grab the headlines with a market leading low rate, sometimes lenders will charge a higher fee to offset the lower margins they make on the rate, whereas some lenders will charge lower, or even no fees, but offer a slightly higher rate.’[1]
‘Depending on your requirements, either scenario may be the best option for you, but it’s important to seek professional advice where your adviser will be able to carry out a true cost analysis over the term of the preferential rate or term of the mortgage to establish the best course of action.’[1]
[1] http://www.propertyreporter.co.uk/finance/17-dr0p-in-average-fix-rate-mortgage-fee.html