Britons are at risk of paying substantially more in mortgage costs despite falling interest rates. with households in the North East of England forking over an extra £639.
Homeowners are being reminded to get financial advice to make sure they “get the cheapest deal” when negotiating the end of their fixed rate deal.
Average mortgage rates for two-year and five-year fixed rate products have dropped for six consecutive months but experts are warning the “best rate isn’t a straightforward choice”.
This is because cheapest mortgage cost is up to £639 more expensive than the cheapest fee-free mortgage offer.
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Mortgage repayments could be raised higher if homeowners get a 'cheaper deal'
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Research carried out by TotallyMoney found that the lowest fixed-rate deal at 4.63 per cent plus £999 fee would cost £375 more than the lowest fee-free offer over two years.
This figure accounts for the average UK property price with a 75 per cent loan-to-value (LTV) mortgage attached.
Notably, average prices in the UK are at their lowest in the North East. However, the discrepancy in cost between the cheapest mortgage cost and the cheapest fee-free mortgage offer is £639 regardless.
In comparison, residents in London could save £81 over two years on the average property priced at £505,000 if they choose the cheapest mortgage cost over the cheapest fee-free offering.
Around 1.5 million fixed rate mortgage deals are expected to come to an end later this year, which means households will be preparing to negotiate a new deal with their lender or be placed on a variable rate.
This comes as the number of homeowners in mortgage arrears has increased by seven per cent with hiked interest rates pushing repayments up.
Andrew Hagger, the founder of Moneycomms, urged customers “don’t go in blind” to negotiations with lenders to avoid paying more in mortgage repayments.
He said: “The mortgage market is a potential minefield for would-be borrowers, with thousands of products and different rate and fee combinations — if you don’t use the services of an independent broker, you can easily come unstuck.
“The best ‘rate only’ or rate plus fee combination isn’t a straightforward choice and you’ll need an expert number cruncher to make sure you get the cheapest deal for your circumstances.
“Your mortgage is the biggest financial transaction that you’re likely to make in your lifetime, so don’t go in blind otherwise you could end up paying way more than you need to in repayments.”
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The Bank of England base rate is at a 15-year high of 5.25 per cent GB NEWSHere is a breakdown of the how much each region in the UK are at risk of paying if they choose the cheapest mortgage cost rather than the cheapest fee-free mortgage offer cost, according to Moneycomms.
Region: UK
Average property price: £284,95075 per cent LTV: £213,713
Cheapest mortgage cost: £29,895
Cheapest fee-free mortgage offer cost: £29,520
Difference over two year: +£375
Region: England
Average property price: £301,613
75 per cent LTV: £226,210
Cheapest mortgage cost: £31,575
Cheapest fee-free mortgage offer cost: £31,248
Difference over two years: +£327
Region: Scotland
Average property price: £194,006
75 per cent LTV:
Cheapest mortgage cost:
Cheapest fee-free mortgage offer cost:
Difference over two year: +£591
Region: Wales
Average property price: £212,866
75 per cent LTV: £159,650
Cheapest mortgage cost: £22,575
Cheapest fee-free mortgage offer cost:
Difference over two years: +£519
Region: Northern Ireland
Average property price: £179,530
75 per cent LTV: £134,648
Cheapest mortgage cost: £19,191
Cheapest fee-free mortgage offer cost: £18,600
Difference over two years: +£591
Region: North East
Average property price: £159,871
75 per cent LTV: £119,903
Cheapest mortgage cost: £17,199
Cheapest fee-free mortgage offer cost: £16,560
Difference over two years: +£639
Region: North West
Average property price: £213,333
75 per cent LTV: £160,000
Cheapest mortgage cost: £22,623
Cheapest fee-free mortgage offer cost: £22,104
Difference over two years: +£519
Region: Yorks & Humber
Average property price: £209,526
75 per cent LTV: £157,145
Cheapest mortgage cost: £22,239
Cheapest fee-free mortgage offer cost: £21,696
Difference over two years: +£543
Region: East Midlands
Average property price: £243,577
75 per cent LTV: £182,683
Cheapest mortgage cost: £25,695
Cheapest fee-free mortgage offer cost: £25,224
Difference over two years: +£471
Region: West Midlands
Average property price: £243,655
75 per cent LTV: £182,741
Cheapest mortgage cost: £25,695
Cheapest fee-free mortgage offer cost: £25,224
Difference over two years: +£471
Region: East
Average property price: £346,659
75 per cent LTV: £259,994
Cheapest mortgage cost: £36,135
Cheapest fee-free mortgage offer cost: £35,904
Difference over two years: +£231
Region: London
Average property price: £505,283
75 per cent LTV: £378,962
Cheapest mortgage cost: £52,239
Cheapest fee-free mortgage offer cost: £52,320
Difference over two years: -£81
Region: South East
Average property price: £385,844
75 per cent LTV: £289,383
Cheapest mortgage cost: £40,119
Cheapest fee-free mortgage offer cost: £39,960
Difference over two years: +£159
Region: South West
Average property price: £319,221
75 per cent LTV: £239,416
Cheapest mortgage cost: £33,375
Cheapest fee-free mortgage offer cost: £33,072
Difference over two years: +£303.
