Last month’s historic cut of bank rate down to 0.25% promised savings for loads of borrowers, however, fees have risen just as dramatically to a two-year high, meaning that on average, borrowers are paying £970 in fees when they take out a mortgage. If you’re looking to take out a fixed-rate deal you can expect this to be even higher, at an eye-watering £985.
Many experts believe that the reason for these almost absurdly high fees is that the banks are trying to get back at least some of the profit that they’re missing out on as a result of low rates.
For shorter-term deals of around 2 years, a hefty fee could actually mean you end up paying even more in the long run, even if the interest rate is substantially less. With fees now ranging from anywhere between £199 to £1499 and beyond, you could even end up paying hundreds of pounds less for a mortgage with a rate of 1.7% compared to one of 0.99%