Average mortgage fee on the market is now over £1,000, website finds

The average mortgage fee on the market has topped the £1,000 mark for the first time in more than five years as lenders battle to keep their rates looking attractively low, according to a website.

Among mortgage deals which are not fee-free, the average charge is now £1,005, Moneyfacts.co.uk said.

Moneyfacts said providers are upping their fees to balance out their costs as they try to keep the rates they are offering to borrowers as attractively low as possible.

It said many lenders have been reducing their rates to appeal to borrowers looking to re-mortgage following the Bank of England base rate increase in August – which may have prompted some people sitting on a mortgage deal which has become more expensive to start looking around.

Charlotte Nelson, a finance expert at Moneyfacts.co.uk, said: “It is disappointing news that the average mortgage fee is not only on the increase, but it is the highest it has been in over five years, surpassing £1,000 for the first time since August 2013.”

In August 2013, the average mortgage fee stood at £1,001.

Ms Nelson continued: “Providers are currently fighting among themselves to be seen as the lender offering the lowest rate on the market, all in a bid to attract borrowers who are considering re-mortgaging after the recent rate rise by the Bank of England.

“However, the increase in the average fee is in direct response to these rate cuts.”

Ms Nelson cautioned that people looking for a mortgage deal weigh up any fees alongside the mortgage rate to work out the overall cost.

She said: “While these low-rate deals look great on paper, the hefty fee that goes alongside them can mean that what appears to be a cheap offer may in reality be a much costlier one.”

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