When it comes to recommending a mortgage deal, it certainly pays to start with the loan rate, but as this article says, you really need to consider the overall package. Which? interviewed a thousand homeowners, and found that the vast majority couldn’t work out the overall cost of their mortgage.
Interestingly, the study broke down the questions into groups to discuss a range troublesome mortgage elements:
It asked interviewees to rank five two-year fixed-rate mortgages in order of total cost over the two years, including monthly repayment charges and arrangement fees, based on borrowing £100,000.
Only five people (0.5 per cent) correctly ranked all five mortgage deals in the correct order, and just a quarter (27 per cent) could identify the cheapest and most expensive deals, despite half (49 per cent) saying they actually found the test easy.
Here at Limetree, we’ve found lots of problem-areas in mortgage costs. For example, it is particularly important to consider the overall package with a £100,000 loan – where the arrangement fees will have a big impact. It is also worth remembering that some lenders may be more harsh on people with buy-to-lets in their background. Others might charge more when a salary has a large component of bonus, or may show preference for those employed by a company over the self employed.
There will always be a need for cost-comparison web sites, but I certainly feel that professional advice will not be totally replaced by these service. So, give Limetree a call to talk about your complete mortgage deal.