2014

Number of Mortgages Available on the Rise but Consumers Still Suffering From High Fees

CHESTER, England, October 8, 2012 /PRNewswire/ --

  • Since April, the number of mortgage products for 60, 70, 85 per cent LTVs has increased by 18 per cent from 1,302 to 1,541 products
  • Rates decrease on fixed rate mortgages, but high fees still commonplace

The number of mortgages available for borrowers has started to increase since April when The Bank of England's Funding for Lending scheme was introduced, with fixed rate mortgages also falling, according to research by MoneySupermarket.

Analysis by Britain's number one comparison site found the number of mortgages available for borrowers has started to increase, particularly among the 60, 75 and 80 per cent loan to value (LTV) products. Since April, there has been a 14 per cent increase in the number of 75 per cent LTV mortgages available, rising from 636 to 725. For 80 per cent LTVs, there has been a 17 per cent increase, from 381 to 446.

Rates on fixed mortgages have started to fall slightly, with rates on two-year fixed mortgages falling from 4.21 per cent in April, to 4.05 per cent, compared to rates on two-year tracker mortgages which has risen from 3.58 per cent to 3.74 per cent. Although the fall in fixed rates is welcome, this is often being offset by the rise of the cost of fees with average total fees for a two-year fixed mortgage increasing from £1,170.50 to £1,370.16, a 17 per cent increase since April. Many borrowers may find they are actually paying more for their mortgage despite the fall in rates.

Clare Francis, mortgage expert at MoneySupermarket  said: "Attempts by the Bank of England to stimulate the economy to start lending again through its Funding for Lending Scheme, making £80 billion of lending available at a low cost to the industry, has spelled some good news for borrowers. Our analysis shows there are now more mortgages available than six months ago, and fixed rates have been falling since April.

"However, this is masking the true picture of the total cost of a mortgage. While fixed rates have come down, arrangement fees have increased, offsetting much of the impact of lower rates, meaning it is not necessarily any cheaper to get a mortgage now, despite the  funding initiative. It's also worth noting that the average rates on tracker mortgages are higher than they were six months ago.

"When comparing mortgages borrowers should always look at the total amount they would repay, including fees, over the term of the deal. This is the only way to identify which product will be the best value. It's also important to think about whether you want a fixed or variable rate deal, and if you do opt for a variable rate mortgage you need to ensure that you will be able to afford your monthly repayments if and when interest rates do rise as they won't stay at this level forever."

 

Notes to Editors

                                        2 Year Fixed
                                                  Average       Average
                             No of    Average   Arrangement     Booking       Average
              Average Rate  Products    LTV         Fee           Fee        Total Fee
    3rd
    October
    2012         4.05%        744       75%        £999.72       £370.44      £1,370.16

    3rd
    September
    2012         4.18%        687       75%        £961.21       £326.36      £1,287.57

    3rd
    August
    2012         4.23%        656       75%        £964.71       £345.02      £1,309.73

    3rd April
    2012         4.21%        523       78%        £854.87       £315.63      £1,170.50


                                        5 Year Fixed
                                                  Average       Average
                             No of    Average   Arrangement     Booking       Average
              Average Rate  Products    LTV        Fee           Fee         Total Fee
    3rd
    October
    2012         4.49%        483       76%        £822.89       £343.81      £1,166.70
    3rd
    September
    2012         4.61%        448       77%        £819.71       £250.79      £1,070.50
    3rd
    August
    2012         4.65%        397       77%        £792.34       £295.84      £1,088.18
    3rd April
    2012         4.67%        283       79%        £720.08       £276.75       £996.83
 
                                       2 Year Tracker
                                                  Average        Average
                             No of    Average    Arrangement     Booking       Average
              Average Rate  Products    LTV         Fee           Fee         Total Fee
    3rd
    October 
    2012         3.74%        337       73%        £989.76      £335.43      £1,325.19
    3rd
    September
    2012         3.83%        331       73%        £975.87      £314.28      £1,290.15
    3rd
    August
    2012         3.91%        302       73%        £924.17      £352.47      £1,276.64
    3rd April
    2012         3.58%        197       74%        £840.18      £440.91      £1,281.09
 
                                      Lifetime Tracker
                                                    Average      Average
                             No of     Average    Arrangement    Booking      Average
              Average Rate  Products    LTV          Fee          Fee        Total Fee
    3rd 
    October
    2012         3.72%         99       75%        £1,047.13     £576.87     £1,624.00
    3rd
    September
    2012         3.73%         99       75%        £1,047.13     £576.87     £1,624.00
    3rd
    August
    2012         3.76%        100       75%        £1,047.13     £603.25     £1,650.38
    3rd April
    2012         3.56%        109       75%        £1,043.53     £465.35     £1,508.88


                                         60% LTV
                                             Average        Average
                                No of      Arrangement      Booking        Average
                 Average Rate  Products        Fee            Fee         Total Fee
    3rd October
    2012            3.63%        370        £1,105.80       £473.25       £1,579.05
    3rd
    September
    2012            3.72%        359        £1,055.44       £382.41       £1,437.85
    3rd August
    2012            3.79%        340        £1,058.59       £447.29       £1,505.88
    3rd April
    2012            3.86%        285        £1,024.78       £468.72       £1,493.50

                                         75% LTV
                                             Average        Average
                                No of      Arrangement      Booking        Average
                 Average Rate  Products       Fee            Fee          Total Fee
    3rd October
    2012            3.95%        725         £906.33        £337.83       £1,244.16
    3rd
    September
    2012            4.03%        693         £888.67        £294.36       £1,183.03
    3rd August
    2012            4.07%        663         £883.98        £314.12       £1,198.10

    3rd April
    2012            3.92%        636         £845.76        £348.97       £1,194.73

                                         80% LTV
                                             Average       Average
                                No of      Arrangement     Booking        Average
                 Average Rate  Products        Fee          Fee          Total Fee
    3rd October
    2012            4.11%        446         £824.52        £225.99       £1,050.51
    3rd
    September
    2012            5.27%        253         £708.19        £279.22        £987.41
    3rd August
    2012            4.16%        366         £828.42        £216.89       £1,045.31
    3rd April
    2012            4.02%        381         £781.10        £206.07        £987.17

                                         90% LTV
                                              Average       Average
                                No of       Arrangement     Booking       Average
                 Average Rate  Products         Fee          Fee         Total Fee
    3rd October 
    2012            5.24%        254         £692.59        £281.53       £974.12
    3rd
    September
    2012            5.27%        253         £708.19        £279.22       £987.41
    3rd August 
    2012            5.30%        242         £701.39        £315.94      £1,017.33
    3rd April
    2012            5.26%        301         £708.51        £264.14       £972.65

                                         95% LTV
                                             Average        Average
                                No of      Arrangement      Booking       Average
                 Average Rate  Products        Fee            Fee        Total Fee
    3rd October
    2012            5.89%         30         £643.05        £183.85       £826.90
    3rd
    September
    2012            5.86%         26         £698.67        £182.17       £880.84
    3rd August
    2012            5.82%         26         £722.00        £171.28       £893.28
    3rd April
    2012            5.76%         31         £591.79        £224.05       £815.84



MoneySupermarket.com compares (at 20th July 2012)

  • 102 car insurance providers and 81 home insurance providers
  • 11 broadband providers and 18 energy providers   
  • 32 unsecured loan and 6 secured loan providers
  • 60 mortgage lenders and 28 credit card providers
  • 67 savings providers and 37 current account providers.
  • Over 1,600,000 mobile phone deals

Our customers

We help our customers to save money on all of their household bills by providing a free, easy-to-use online service so they can compare a wide range of products in one place and find the product most suited to their needs. Our size means we are able to offer our customers exclusive, market-leading deals, including some they can't even get direct from providers.

Our providers

By having considerable volumes of informed customers actively looking for products and ready to purchase, we offer our providers an efficient and cost-effective customer acquisition solution across all of our channels. This enables our providers to target their marketing spend in an effective and completely measurable way.

Our revenue comes predominantly from fees paid to us by product providers when a customer clicks through to their website and actually applies for or purchases a product. It is a success-based marketing fee.

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For further information please contact:

Paul Lawler
PR Manager
Tel: +44(0)1244-370-317
e-mail: paul.lawler@moneysupermarket.com

SOURCE moneysupermarket.com




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