It’s not just rates which lenders are using to attract customers to their mortgage deal – many products have tempting ‘incentive’ packages which can prove financially lucrative too.
Anyone remortgaging in the run up to Christmas – or even new first-time buyers – could find they benefit from fixed-rate deals which offer free or refunded legal fees or valuations or which have no product fee.
Analysts at Moneyfacts.co.uk, are suggesting borrows who don’t want the burden of a high upfront cost should consider one which carries such benefits.
And there are plenty to choose from, with the latest analysis revealing more than 40% of the mortgages on the market don’t charge any product fee at all.
Meanwhile, at the moment, half of the deals available offer free or refunded legal fees and 69% provide free or refunded valuations.
Rachel Springall, finance expert at Moneyfacts.co.uk, explained not all borrowers were necessarily drawn in by the rate alone.
She added: “There could be borrowers who want to save on the upfront cost of the deal, such as with product fees or paying out on other fundamentals.
“Remortgage customers, in particular, may be considering a new deal if they are a variable rate because of the fixed mortgage rate war.”
And she added at this time of year, when people were already spending a lot of money on the festive season, having to pay out less on the initial costs of a mortgage could be very helpful.
“They may then wish to avoid paying hundreds of pounds in the run up to Christmas to pay fees to secure a new mortgage deal, whether it be a product fee, instructing a valuation or appointing a solicitor,” Springall added.
“First-time buyers can also benefit from this type of bundle too.”
What to consider
If you are thinking of opting for a mortgage with a free valuation, bear in mind this will usually be a ‘basic’ valuation. If you were to instruct your own surveyor to do the job, they will provide a far more comprehensive estimate.
Moneyfacts also advised that while half of the market offers free legal fees as part of their ‘bundle’, some borrowers may feel happier and more comfortable using their own solicitor.
Springall added: “Weighing up the overall true cost of a mortgage is essential, as the right deal depends on how much someone is looking to borrow and for how long. If in doubt, borrowers would be wise to seek independent financial advice to navigate the mortgage maze.”
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