Brokers say mortgage fees could be the next battleground for lenders, with little room for them to lower fixed rates further.
In recent weeks, lenders including Accord Mortgages, Barclays, Hinckley & Rugby Building Society, Skipton Building Society and Virgin Money have announced cuts to fixed-rate mortgages.
As lenders seek to remain competitive, London & Country associate director of communications David Hollingworth says they will increasingly turn to low-fee and fee-free products.
He says: “It’s good to see lenders repositioning and getting more competitive. In terms of how they can continue to attract more business in an environment of low rates, I think we will start to see more fee-incentive products.
“There isn’t huge capacity for further rate cuts so fees could be the next battleground for lenders.”
Start Financial Services manager Tom Cleary says: “There are a number of products on the market with low or no fees. If lenders want to stay competitive, that’s likely to be the way to do it because rates are probably as low as we are going to see.”