Number of Mortgages Available on the Rise but Consumers Still Suffering From High Fees
CHESTER, England, October 8, 2012 /PRNewswire/ --
- Since April, the number of mortgage products for 60, 70, 85 per cent LTVs has increased by 18 per cent from 1,302 to 1,541 products
- Rates decrease on fixed rate mortgages, but high fees still commonplace
The number of mortgages available for borrowers has started to increase since April when The Bank of England's Funding for Lending scheme was introduced, with fixed rate mortgages also falling, according to research by MoneySupermarket.
Analysis by Britain's number one comparison site found the number of mortgages available for borrowers has started to increase, particularly among the 60, 75 and 80 per cent loan to value (LTV) products. Since April, there has been a 14 per cent increase in the number of 75 per cent LTV mortgages available, rising from 636 to 725. For 80 per cent LTVs, there has been a 17 per cent increase, from 381 to 446.
Rates on fixed mortgages have started to fall slightly, with rates on two-year fixed mortgages falling from 4.21 per cent in April, to 4.05 per cent, compared to rates on two-year tracker mortgages which has risen from 3.58 per cent to 3.74 per cent. Although the fall in fixed rates is welcome, this is often being offset by the rise of the cost of fees with average total fees for a two-year fixed mortgage increasing from £1,170.50 to £1,370.16, a 17 per cent increase since April. Many borrowers may find they are actually paying more for their mortgage despite the fall in rates.
Clare Francis, mortgage expert at MoneySupermarket said: "Attempts by the Bank of England to stimulate the economy to start lending again through its Funding for Lending Scheme, making £80 billion of lending available at a low cost to the industry, has spelled some good news for borrowers. Our analysis shows there are now more mortgages available than six months ago, and fixed rates have been falling since April.
"However, this is masking the true picture of the total cost of a mortgage. While fixed rates have come down, arrangement fees have increased, offsetting much of the impact of lower rates, meaning it is not necessarily any cheaper to get a mortgage now, despite the funding initiative. It's also worth noting that the average rates on tracker mortgages are higher than they were six months ago.
"When comparing mortgages borrowers should always look at the total amount they would repay, including fees, over the term of the deal. This is the only way to identify which product will be the best value. It's also important to think about whether you want a fixed or variable rate deal, and if you do opt for a variable rate mortgage you need to ensure that you will be able to afford your monthly repayments if and when interest rates do rise as they won't stay at this level forever."
Notes to Editors
2 Year Fixed
Average Average
No of Average Arrangement Booking Average
Average Rate Products LTV Fee Fee Total Fee
3rd
October
2012 4.05% 744 75% £999.72 £370.44 £1,370.16
3rd
September
2012 4.18% 687 75% £961.21 £326.36 £1,287.57
3rd
August
2012 4.23% 656 75% £964.71 £345.02 £1,309.73
3rd April
2012 4.21% 523 78% £854.87 £315.63 £1,170.50
5 Year Fixed
Average Average
No of Average Arrangement Booking Average
Average Rate Products LTV Fee Fee Total Fee
3rd
October
2012 4.49% 483 76% £822.89 £343.81 £1,166.70
3rd
September
2012 4.61% 448 77% £819.71 £250.79 £1,070.50
3rd
August
2012 4.65% 397 77% £792.34 £295.84 £1,088.18
3rd April
2012 4.67% 283 79% £720.08 £276.75 £996.83
2 Year Tracker
Average Average
No of Average Arrangement Booking Average
Average Rate Products LTV Fee Fee Total Fee
3rd
October
2012 3.74% 337 73% £989.76 £335.43 £1,325.19
3rd
September
2012 3.83% 331 73% £975.87 £314.28 £1,290.15
3rd
August
2012 3.91% 302 73% £924.17 £352.47 £1,276.64
3rd April
2012 3.58% 197 74% £840.18 £440.91 £1,281.09
Lifetime Tracker
Average Average
No of Average Arrangement Booking Average
Average Rate Products LTV Fee Fee Total Fee
3rd
October
2012 3.72% 99 75% £1,047.13 £576.87 £1,624.00
3rd
September
2012 3.73% 99 75% £1,047.13 £576.87 £1,624.00
3rd
August
2012 3.76% 100 75% £1,047.13 £603.25 £1,650.38
3rd April
2012 3.56% 109 75% £1,043.53 £465.35 £1,508.88
60% LTV
Average Average
No of Arrangement Booking Average
Average Rate Products Fee Fee Total Fee
3rd October
2012 3.63% 370 £1,105.80 £473.25 £1,579.05
3rd
September
2012 3.72% 359 £1,055.44 £382.41 £1,437.85
3rd August
2012 3.79% 340 £1,058.59 £447.29 £1,505.88
3rd April
2012 3.86% 285 £1,024.78 £468.72 £1,493.50
75% LTV
Average Average
No of Arrangement Booking Average
Average Rate Products Fee Fee Total Fee
3rd October
2012 3.95% 725 £906.33 £337.83 £1,244.16
3rd
September
2012 4.03% 693 £888.67 £294.36 £1,183.03
3rd August
2012 4.07% 663 £883.98 £314.12 £1,198.10
3rd April
2012 3.92% 636 £845.76 £348.97 £1,194.73
80% LTV
Average Average
No of Arrangement Booking Average
Average Rate Products Fee Fee Total Fee
3rd October
2012 4.11% 446 £824.52 £225.99 £1,050.51
3rd
September
2012 5.27% 253 £708.19 £279.22 £987.41
3rd August
2012 4.16% 366 £828.42 £216.89 £1,045.31
3rd April
2012 4.02% 381 £781.10 £206.07 £987.17
90% LTV
Average Average
No of Arrangement Booking Average
Average Rate Products Fee Fee Total Fee
3rd October
2012 5.24% 254 £692.59 £281.53 £974.12
3rd
September
2012 5.27% 253 £708.19 £279.22 £987.41
3rd August
2012 5.30% 242 £701.39 £315.94 £1,017.33
3rd April
2012 5.26% 301 £708.51 £264.14 £972.65
95% LTV
Average Average
No of Arrangement Booking Average
Average Rate Products Fee Fee Total Fee
3rd October
2012 5.89% 30 £643.05 £183.85 £826.90
3rd
September
2012 5.86% 26 £698.67 £182.17 £880.84
3rd August
2012 5.82% 26 £722.00 £171.28 £893.28
3rd April
2012 5.76% 31 £591.79 £224.05 £815.84
MoneySupermarket.com compares (at 20th July 2012)
- 102 car insurance providers and 81 home insurance providers
- 11 broadband providers and 18 energy providers
- 32 unsecured loan and 6 secured loan providers
- 60 mortgage lenders and 28 credit card providers
- 67 savings providers and 37 current account providers.
- Over 1,600,000 mobile phone deals
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