Look Beyond the Declining Remortgage Interest Rates in Search of Rising Arrangement Fees
If you are a homeowner that is interested in a remortgage you will be quite happy to hear that there seems to be almost no need to rush out and find a remortgage before the next meeting of the Bank of England’s Monetary Policy Committee (MPC). Economists totally expect the MPC to leave the standard base interest rate at 0.5 per cent not only for another month but throughout the rest of the year. Despite the lack of possibility of there being a change in the interest rate, there are reasons for shopping around for a great remortgage deal, one being the offers currently available.
Lenders have become more competitive and are serving up some of the best remortgage deals in years. Fixed rate remortgages have become as attractive as trackers in some cases, and incentives are plentiful to bring homeowners in to sign the line on the deal. Yet, there is a caution involved despite the many opportunities that abound for a homeowner searching for a remortgage and it is the lurking fees that lenders are using to offset the cheap remortgage rates. Current research shows that the average mortgage arrangement fee increased by 17 per cent in the last 12 months pushing an average cost of £879 to £1,030.
Moneyfacts reported the increase in the arrangement fees and a spokesperson said, “Lenders appear to be off-setting the low mortgage rates on offer by increasing the arrangement fees as they battle to offer the lowest headline rate.”
Melanie Bien, director at Private Finance, remarked “Consumers who look at best buy tables could be misled as all they see is the headline rate and many will be in for a shock when they see how large the fees are.”
Experts suggest a thorough look at any remortgage deal and make sure you are aware of any associated fees. Take into consideration the fees when looking at any savings you can achieve through incentives or a break in an interest rate. By looking at the small print and being clear of what your remortgage deal involves and offers will insure you get the best remortgage deal for your situation.