The True Cost Challenge from Britannia Building Society, urges borrowers not to be seduced by the headline rate, but to consider fees and other added costs.
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Look closely at the hidden costs of a mortgage the administration fees, valuation charges, conveyancing costs and exit fees and to consider if they are paying too much with other lenders, which they often are.
The latest advertising campaign from NatWest states it will give borrowers with Abbey, Halifax, Lloyds TSB and Woolwich £1,000 if it can beat the rate the customer is currently being charged in comparison to its two-year discount tracker.
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However, Britannias two-year discount tracker, based on a £110,000 repayment mortgage, beats the true costs of NatWests product.
This is because Natwest charge an arrangement fee of £699, compared to Britannias £499 and a valuation fee and redemption fee of £225, while Britannia comes in at £150 and £110 respectively.
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Neville Richardson, Britannia Chief Executive, said: Rather than be seduced by headline rates, we would encourage borrowers to look closely at the deal they are committing to. We want to encourage anyone looking for a new mortgage to take the True Cost Mortgage Challenge.
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