Industry officials are warning that consumers need to make sure that they are vigilant about the fees and additional charges that are being applied to many mortgage products, as these can be very expensive and can really bump up the cost of the mortgage loan. Officials have stated that many people that are looking for mortgage loans or a remortgage are simply looking at the headline rate without looking at what sorts of other costs are involved.

Consumers are warned to be careful that they read the small print. This is because many lenders make a big deal about advertising their headline rates, which in some cases may appear to be low, but they don’t make a big deal about advertising the hidden charges, which can make a huge difference to the amount that the mortgage loan actually costs you.

One industry official said: ‘The sudden switch to more competitive fixed rates demonstrates that the mortgage market continues to be volatile. Fixed rates are back but eye-catching deals at less than 5% will often come with massive fees and borrowers need to be careful. The market changes day by day.’

Borrowers are also reminded that there are other rising costs to think about when taking out a mortgage, such as the higher level of deposit that has be paid. Some lenders are charging thousands of pounds by way of arrangement fees, in addition to a sizeable deposit, all of which will affect affordability for consumers.

Some lenders have been advertising what seems to be a good headline rate in order to try and bring in fresh customers, but borrowers have then found out that the other fees and charges associated with the mortgage are very high.

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