Mortgage lenders 'move away' from low-fee mortgage deals

01-Nov-2006

First time buyers should be cautious of low-rate, high-fee mortgage deals, new research claims.

According to research published by moneyfacts.co.uk, despite the apparently low headline rate, first time buyers and repeat purchasers should investigate whether the low interest-rate offsets the cost of the fee.

"It is vital in this instance that you do your maths - calculate the break-even point whereby you are getting a low enough rate for the size of your mortgage, which makes the high fee less relevant," said Darren Cook, head of mortgage research at moneyfacts.co.uk.

"Don't be lured by low interest rates, if the deal looks too good to be true, it often is," he added.

A number of major lenders, including Northern rock and Halifax, offer fee-bearing mortgages with low headline rates between 3.99 per cent and 4.64 per cent.

However, fees can between £399 and £1,499.

Moneyfacts.co.uk offer comparisons on a range of financial products, including mortgages and pension products.

The FirstRungNow table of best mortgages describes features of the best buys for first time buyers.

For our first time buyers guide to buying a property click here.

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