The average product fee currently charged on a fixed-rate mortgage, excluding no-fee products, has risen by £46 since March 2023, to stand at £1,141, according to Moneyfactcompare.co.uk
The average fixed-rate mortgage fee has risen, while a shrinking proportion of deals are offering perks like free legal fees or cashback, according to a financial information website.
Moneyfactcompare.co.uk found that the average product fee currently charged on a fixed-rate mortgage, excluding no-fee products, has risen by £46 since March 2023, to stand at £1,141.
The website found that just more than a third (35%) of fixed-rate deals do not charge a product fee, down from 43% at the beginning of March 2023.
The proportion of fixed-rate mortgage deals on the market offering a free or refunded valuation has dropped to 73%, from 75% at the beginning of March 2023.
The percentage of fixed-rate mortgage deals with free or refunded legal fees has dropped to 44%, from 45% a year back.
A quarter (25%) of fixed-rate mortgages come with cashback, down from just more than a third (34%) in March 2023.
Nonetheless, while the proportions of fixed-rate mortgages on the market offering certain perks have decreased over the past year, the number of fixed-rate mortgages available generally has risen. This general rise in the number of deals available has meant that the number of deals offering perks has risen.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, commented: Borrowers concerned about increasing fixed mortgage rates would be wise not to rush when comparing deals and make sure they consider the overall true cost package, as the average mortgage fee has risen.
There is an abundance of deals to suit different needs, some may be headline-grabbing rates, but these can also charge a high up-front fee, she said.
She said: 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 marginally higher initial fixed rate and lower product fee could be a better package, based on true cost.
She added: Mortgage interest rates remain volatile, and this may well be the case for the next few weeks. However, even if borrowers lock into a rate that is marginally higher than what may have been available a few weeks back, 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.