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Mortgage fees and choice of incentives on the rise

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
30/11/2023

Mortgage fees and choice of incentives on the rise

Lenders are offering more fixed deals with incentives since the start of November 2023, but analysis by Moneyfactscompare.co.uk also reveals the average mortgage fee has risen.

Mortgage fees and choice of incentives on the rise

Lenders are offering more fixed deals with incentives since the start of November 2023, but analysis by Moneyfactscompare.co.uk also reveals the average mortgage fee has risen.

  • Mortgage product fees have risen on average. At £1,108, the average fee currently charged on a fixed rate mortgage deal (not including no-fee products) has risen by £21 since the start of November 2023.
  • The proportion of the market offering fixed rate mortgage deals that offer a free or refunded valuation incentive has risen to 76%, up from 70% at the start of November 2023.
  • The proportion of the market offering fixed rate mortgage deals that offer a free or refunded legal fees incentive has risen to 44%, up from 42% at the start of November 2023.
  • Mortgage product fees have risen on average. At £1,108, the average fee currently charged on a fixed rate mortgage deal (not including no-fee products) has risen by £21 since the start of November 2023.
  • The proportion of the market offering fixed rate mortgage deals that offer a free or refunded valuation incentive has risen to 76%, up from 70% at the start of November 2023.
  • The proportion of the market offering fixed rate mortgage deals that offer a free or refunded legal fees incentive has risen to 44%, up from 42% at the start of November 2023.

 

Fixed mortgage market analysis

 

Dec-21

Dec-22

Nov-23

28-Nov-23

Average product fee £ (excluding deals with no fee)

£1,088

£1,107

£1,087

£1,108

Deals with no £ product fee

1,696 (36%)

1,350 (44%)

1,690 (34%)

1,767 (35%)

Deals with free/refunded legal fees

2,111 (45%)

1,502 (49%)

2,050 (42%)

2,216 (44%)

Deals with a free/refunded valuation

3,417 (73%)

2,264 (73%)

3,434 (70%)

3,809 (76%)

Deals with £ cashback

1,569 (34%)

1,128 (36%)

1,225 (25%)

1,317 (26%)

Average rate (deals with £ fee)

2.94%

6.21%

6.44%

6.23%

Average rate (deals with no £ fee)

2.67%

6.23%

6.26%

6.09%

The % shown is the proportion of deals out of the fixed mortgage market. Data shown is as at the first available day of the month, unless stated otherwise.

Source: Moneyfactscompare.co.uk

 

 

Fixed mortgage market analysis

 

Dec-21

Dec-22

Nov-23

28-Nov-23

Average product fee £ (excluding deals with no fee)

£1,088

£1,107

£1,087

£1,108

Deals with no £ product fee

1,696 (36%)

1,350 (44%)

1,690 (34%)

1,767 (35%)

Deals with free/refunded legal fees

2,111 (45%)

1,502 (49%)

2,050 (42%)

2,216 (44%)

Deals with a free/refunded valuation

3,417 (73%)

2,264 (73%)

3,434 (70%)

3,809 (76%)

Deals with £ cashback

1,569 (34%)

1,128 (36%)

1,225 (25%)

1,317 (26%)

Average rate (deals with £ fee)

2.94%

6.21%

6.44%

6.23%

Average rate (deals with no £ fee)

2.67%

6.23%

6.26%

6.09%

The % shown is the proportion of deals out of the fixed mortgage market. Data shown is as at the first available day of the month, unless stated otherwise.

Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“As interest rates on fixed mortgages gradually fall, it’s positive to see lenders are conscious of the incentives on offer to borrowers. However, borrowers need to be wary of the upfront cost of their mortgage as average mortgage fees have risen. There are fee-free deals out there and incentive packages could be ideal for borrowers who have limited funds to cover the cost of a new deal, some could even pay cashback. A free valuation incentive is offered on most fixed rate mortgages in the market. There are even more now compared to the start of November 2023, but in addition, there are now more deals that offer free legal fees, cashback or do not charge a product fee.

“Low-rate mortgages undoubtedly grab attention, but amid a cost of living crisis it is becoming ever more critical that borrowers find ways to save money upfront as well as over the lifetime of their mortgage. The average product fee stands above £1,000, and low-rate mortgages can carry some of the highest fees, so they may not be the best choice. Seeking independent financial advice is vital to assess the overall costs of any deal.

“Borrowers looking to refinance could make substantial savings by switching their mortgage if they are sitting on their standard variable rate. If someone has little cash to pay for the upfront costs of a new deal, they can find fee-free offers or those that cover legal fees, a valuation or even pay cashback – there are even lenders who will offer all these combined. Those buying a home for the first time could well have exhausted their savings and may benefit from a mortgage deal with a bundle of incentives.”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“As interest rates on fixed mortgages gradually fall, it’s positive to see lenders are conscious of the incentives on offer to borrowers. However, borrowers need to be wary of the upfront cost of their mortgage as average mortgage fees have risen. There are fee-free deals out there and incentive packages could be ideal for borrowers who have limited funds to cover the cost of a new deal, some could even pay cashback. A free valuation incentive is offered on most fixed rate mortgages in the market. There are even more now compared to the start of November 2023, but in addition, there are now more deals that offer free legal fees, cashback or do not charge a product fee.

“Low-rate mortgages undoubtedly grab attention, but amid a cost of living crisis it is becoming ever more critical that borrowers find ways to save money upfront as well as over the lifetime of their mortgage. The average product fee stands above £1,000, and low-rate mortgages can carry some of the highest fees, so they may not be the best choice. Seeking independent financial advice is vital to assess the overall costs of any deal.

“Borrowers looking to refinance could make substantial savings by switching their mortgage if they are sitting on their standard variable rate. If someone has little cash to pay for the upfront costs of a new deal, they can find fee-free offers or those that cover legal fees, a valuation or even pay cashback – there are even lenders who will offer all these combined. Those buying a home for the first time could well have exhausted their savings and may benefit from a mortgage deal with a bundle of incentives.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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James Hyde Press & PR Manager
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant