Mortgage rates are dropping
It seems like mortgage rates are starting to drop again. First Direct have reduced their 2 year fixed rate mortgage to 4.75 per cent, anything under 5 per cent is very good at the moment. But you shouldn’t take this as advice get professional advice from a ‘whole of market’ mortgage broker and let them find the best mortgage for your individual circumstances.
The First Direct 2 year fixed rate at 4.75 per cent has a huge application fee of £1,498. I can never understand the reason behind charging such a non descriptive ‘application fee’, ‘booking fee’ is another commonly used phrase. Why do mortgage companies need to charge a fee for doing their job!? They provide mortgages and make very decent profit from the interest they charge so why should they charge a one off made up fee? These fees are often added to the mortgage amount so people end up borrowing even more than they first intended in order to get a good interest rate.
I understand there must be some kind of administrational cost to a mortgage company when underwriting a mortgage but this cost can and should, in my opinion, be factored into the headline interest rate. This way customers won’t be stung with huge fees when they take out a mortgage.