Fees

STEP FIVE:
Watch for the fees. Low rates are vital for most mortgage borrowers. But it’s wrong to focus too much on them and ignore set-up fees on your loan. These have been rising fast in recent years – researchers say many application fees have doubled in the past five years. And if you are paying, say, £699 for a fixed deal (plus any valuation and legal costs) you will want to be absolutely sure that it is right for you. Many lenders now offer a mix and match menu of deals – with slightly higher rates paired with lower fees and vice versa. Add up the total cost of all types of deal (all the fees plus all the monthly repayments over the special offer period) to see which one works out best for you. Remember that if you add fees to your mortgage you will be paying interest on this money, possibly for the life of your loan. So this can ultimately prove to be a false economy.