1.4 million fixed-rate mortgage deals will come to an end in 2008. Most of these will be looking to be replaced with a like for like cheaper fixed rate deal rather than going onto the lenders high standard variable rate (SVR) which could add hundreds of pounds onto monthly mortgage repayments.
In recent weeks, conditions in the market looked like they were turning in the way of the borrower as mortgage interest rates began falling.
But consumer watchdog Which? is warning people not to be distracted by falling interest rates, as mortgage fees are rising. They recently conducted a poll which found 26% of borrowers chose their new rate based on the interest rate rather than the associated fee’s
Only 20% of would be borrowers took into consideration the overall cost of the mortgage deal, including arrangement and booking fees, valuation fee’s and potential higher lending charges.
Jonathan Smith, Chief Broker at the online mortgage brokers in Manchester 'North Mortgages', said: “borrowers need to shop around for the best deal when remortgaging rather than automatically moving onto their current lenders Standard Variable Rate (SVR).”
“As the total cost of mortgages has increased in the last couple of years, its been easy for borrowers to focus on the headline interest rate rather than looking at the total cost of the deal which is more important.”
“Borrowers need to make an effort to look past the that eye-catching interested rate especially as many of the lowest rate mortgage deals are in excess of £1,000.”
He added: “Whatever you do, don’t take the lazy option of simply taking out a deal with your bank or staying on your lender’s standard variable rate.
“If you shop around and do your homework, you could cut your mortgage costs by hundreds of pounds.”
Source - Jonathan Smith, Mortgage Broker www.northmortgages.co.uk
