Fee-free mortgages 'beneficial' for mortgages under £57k

31-Oct-2006

First time buyers may find fee-free mortgages a more expensive alternative, new research suggests.

According to a recent study by moneysupermarket.com, fee-paying mortgages may be more suitable for with lower mortgage requirements rather than first time buyers, as they are generally only beneficial for mortgages below £57,000.

Those looking to remortgage their property may also benefit from a fee-free mortgage.

"It's great to see lenders being innovative with products, but because mortgages can be so complex borrowers need to be cautious and ensure they get the best deal," said Louise Cuming, head of mortgages at moneysupermarket.com.

"Fee-free deals are not as simple as they are marketed to be, so people need to look beyond any headline rates and special offers," she added.

First time buyers should fully examine the terms of a fee-free option, rather than simply looking at the immediate benefits of a fee free deal, as even a large application fee may be offset by a competitive rate of interest, according to moneysupermarket.com.

Although valuation fees vary between products and mortgage providers, the average fee varies between £190 and £565, according to MoneyExpert.com.

For advice on first time buyer mortgages or to find out how much you can borrow and how much it would cost you, contact a good mortgage broker.

Click here to see what properties are on the market in your area – whether you buy alone or with others.

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