The Nottingham Building Society has stated that average fees on ‘best buy’ fixed rate mortgages have fallen 17% since November 2014.
Its analysis shows average fees are now £711 and have fallen £149 or 17% from November 2014 when they were £860. However buyers opting for variable rates have not benefited as much; average fees are £719 compared with £727 in November.
However, mortgage brokers are warning fees could start to rise over the next 24 months. Between November 2011 and November 2014, average fees on best buy fixed rate and variable rate mortgages rose by 20% and 10% respectively.
The society’s research with mortgage brokers reveals that 30% believe mortgage fees will increase over the next two years, against just 12% who expect further falls. Part of the reason may be pressure on rates and less competition among lenders – over the next six months, 23% of brokers anticipate mortgage rates will rise against 16% who think they will fall.
Ian Gibbons, Nottingham mortgage services senior mortgage broking manager, said: “Whatever happens to mortgage rates and fees, there are so many products to choose from if you shop around and receive the right advice, you can still find a really competitive deal that meets your specific needs.
“Our research shows that there are now 4,139 residential mortgages on the market, compared to 4,020 in November last year, and 3,027 in November 2011. So, in just over three years the number of residential mortgages on the market has increased by around 37%.
“In order to grab the headlines with a market leading low rate, sometimes lenders will charge a higher fee to offset the lower margins they make on the rate, whereas some lenders will charge lower, or even no fees, but offer a slightly higher rate.
“Depending on your requirements, either scenario may be the best option for you, but it’s important to seek professional advice where your adviser will be able to carry out a true cost analysis over the term of the preferential rate or term of the mortgage to establish the best course of action.”