This is according to the latest analysis from Moneyfacts which revealed while the average fee charged had fallen by £6 since the high point in April it still remained at £1,075.
Indeed, in April the typical fee was at £1,081 which is the highest on record since November 2012 (£1,095) according to Moneyfacts.
Charging fees has also become more widespread amongst lenders with only 35% of the market not charging fees – this compares to 40% in June 2020.
Meanwhile, Moneyfacts also revealed, this increase in fees came as average rates for fixed mortgage deals at all loan-to-values (LTVs) had also increased by 0.65% for products with fees and by 0.55% for those without.
They have risen by 0.16% and 0.08% respectively over the last two months alone, said Moneyfacts.
Eleanor Williams, finance Exeert at Moneyfacts.co.uk, said comparing cost of fees would be particularly important for first-time buyers who were currently struggling with low savings rates and rising house prices.
“Cash-strapped prospective borrowers may therefore have limited funds available to meet the costs associated with taking on a mortgage, so comparing upfront costs is vital,” she said.
“Lenders may be raising fees to gain margins in the aftermath of a fixed rate war, and this may also potentially be linked to the resurgence of sub-1% mortgages as, whilst eye-catchingly low, these initial rates can also carry the highest fees.
“Borrowers may then need to search a little harder if they are looking to keep mortgage costs to a minimum or secure a fixed rate mortgage without a fee.”
Williams attributed the increase in fixed rates to the return of traditionally higher rated, higher loan-to-value (LTV) products.
“Our latest data shows that current average fixed mortgage rates at all LTVs for deals with a fee (3.08%), and for those without a fee (2.87%), are both over 0.50% more than they were this time last year,” she said.
“The average rate on a deal without a fee is 0.19% lower than in June 2019, so those who are looking to secure a new mortgage may wish to consider acting swiftly, especially considering that both the average rate for deals with a fee and those without a fee rose by 0.16% and 0.08% respectively over just the last two months.”
Fixed Mortgage market analysis (source: Moneyfacts.co.uk) | ||||
Jun-19 | Jun-20 | Apr-21 | Jun-21 | |
Average product fee (excluding deals with no fee) | £1,038 | £1,018 | £1,081 | £1,075 |
Deals with no product fee | 1,675 (42%) | 959 (40%) | 1138 (34%) | 1299 (35%) |
Deals with free/refunded legal fees | 1,968 (50%) | 1,252 (52%) | 1672 (50%) | 1816 (49%) |
Deals with a free/refunded valuation | 2,674 (68%) | 1,863 (78%) | 2403 (72%) | 2695 (73%) |
Deals with cashback | 1,287 (33%) | 781 (33%) | 989 (30%) | 1108 (30%) |
Average rate (deals with fee) | 2.91% | 2.43% | 2.92% | 3.08% |
Average rate (deals with no fee) | 3.06% | 2.32% | 2.79% | 2.87% |
The % shown is the proportion of deals out of the fixed mortgage market. Source: Moneyfacts.co.uk. Data shown is as at the first available day of the month, unless stated otherwise. |