Borrowers seeking fixed and tracker rate mortgages are in for a pleasant surprise because arrangement fees have fallen by around 25% in the past 12 months.
Research by moneysupermarket.com has revealed that the average two year fixed-rate deal now comes with a typical fee of £957, down 30% the £1,243 average charge this time last year.
In addition, the average fee on a three-year fixed-rate mortgage is down to £808, showing a 26% decline on August 2008, and the cost of a two-year tracker now sets a typical borrower back £1,272, or 24% less than a year ago.
The price comparison website’s mortgage channel manager, Hannah-Mercedes Skenfield, comments: “We have seen a significant drop in the average fees on mortgages over the last year but this has been driven by lenders not passing on the benefit of the significant drop in the cost of funds by charging higher interest rates.”
She believes it is still essential for borrowers to check the overall cost of a mortgage, as low fees can be accompanied by uncompetitive interest rates.
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