Banks cotton on to fixed-rate mortgage trend
Published On 9 February 2007
Banks and building societies are cottoning on to the increasing trend for consumers to flock to fixed rate mortgage deals over the last six months, according to one industry website. MoneyExpert.com has identified a distinct pattern consumers jumping on the back of fixed rate mortgage deals following a number of interest rate rises by the Bank of England in the last six months.
But now they are wising up to this trend and – as a result – lifting the application fees on the fixed rate mortgage deals they offer, the financial comparison website states.
It seems the average application fee for such a product has gone up by 18.5 per cent since August 2006.
Sean Gardner, chief executive of MoneyExpert.com, said: "Homeowners are desperate to fix their mortgage rates to avoid incurring further costs caused by rising interest rates. It's the sensible option as further rises aren't out of the question.
"However, banks aren't stupid and fees should be taken into consideration if you're looking to switch. You could incur exit and application fees just for moving provider so check before you commit. These can be hefty and may mean the difference between staying put and moving on."
During the period since August last year, the number of fixed rate mortgage products with a fee of over £750 has increased sevenfold from 13 to 93 while the number with fees under £500 has decreased from 349 to 251.
