Following the news that First Direct is to reduce the arrangement fees for all offset mortgage products, moneysupermarket.com has found that an average 2 year fixed mortgage in 2008 dropped 30 per cent by 2009, whilst an average 3 year fixed mortgage fell 26 per cent. An average 2 year tracker mortgage dropped 24 per cent.
Moneysupermarket mortgage channel manager Hannah-Mercedes Skenfield says: “This is a welcome move by First Direct, which brings its arrangement fee down to a more palatable level.
Borrowers however, still need to be vigilant as often the devil is in the detail; generally products with the lowest interest rates attract the highest fees.
“We have seen a significant drop in the average fees on mortgages over the last year but this has been driven by lenders not passing on the benefit of the significant drop in the cost of funds by charging higher interest rates.
“Borrowers need to shop around to make sure they are getting the best deals on both rate and fees.”