Buyers need to realise the 'true cost' of a mortgage
Thursday, 30 September 2010 6:00 PM
Property buyers should work out the "true cost" of their mortgage rather than relying on the headline rate, it has been claimed.
Research by moneysupermarket.com found that borrowers can pay as much as £3,000 more for their mortgages if they only look at headline rates.
The site compared Principality Building Society's 2.24 per cent deal with HSBC's 2.89 per cent product, finding that the latter will in fact save borrowers £3,185.64 over two years due to the former's high arrangement fee.
Darren Cook, head of press and PR at Moneyfacts.co.uk, said as a mortgage is often the biggest transaction anybody will make in their lives, it is worth taking extra time to ensure it suits them as much as possible.
"Calculate exactly how much it is going to cost with fees as well as rate over the term of the mortgage to see which is the better deal," he advised.
"Do the sums to make sure that you are getting the best deal on the rates side as well as the fees side."
