There’s more to mortgages than interest rates
Choose a best-buy mortgage deal without adding up the associated costs, and you could soon be regretting it.
Low-rate home loans can come with arrangement fees of well over £1000.
And that can cost you the same as choosing a fee-free mortgage with a rate that’s half a percentage point higher – more than cancelling out the benefit of the cheap rate.
Hamptons Mortgages has calculated that taking an £150,000 interest-only mortgage fixed for two years at 4.99 per cent with an arrangement fee of £1499 would add the equivalent of 0.5 per cent a year to the interest rate.
In other words, that 4.99 per cent deal would cost the same as a no-fee loan at 5.49 per cent.
That’s why it’s so important to check out all the costs when you’re deciding on a mortgage.
