Evaluating the true cost of your mortgage is crucial | moneyfacts.co.uk

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Rachel Springall

Rachel Springall

Finance Expert & Press Officer
Published: 06/06/2022

Lenders are now offering more fixed deals without a fee than a year ago. According to our data the proportion of the market offering fixed rate mortgage deals that do not charge a fee has risen from 35% in June 2021 to 40% at the start of this month.

In addition to this, the average rate gap between fixed deals that carry a product fee and those that do not has narrowed, currently at 0.03%. Compared to last year, the gap was 0.21%.

Those in the market for a cashback will also be pleased to find that there are more deals offering this incentive than a year ago.

In the table below we have highlighted this data in more detail.

Fixed mortgage market analysis






Average product fee (excluding deals with no fee)





Deals with no product fee

959 (40%)

1299 (35%)

1632 (37%)

1735 (40%)

Deals with free/refunded legal fees

1,252 (52%)

1816 (49%)

2203 (49%)

2203 (51%)

Deals with a free/refunded valuation

1,863 (78%)

2695 (73%)

3166 (71%)

3105 (72%)

Deals with cashback

781 (33%)

1108 (30%)

1276 (29%)

1350 (31%)

Average rate (deals with fee)





Average rate (deals with no fee)





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.

Table: Lenders are charging less on deals that carry a product fee. Source: Moneyfacts.

Looking on the brightside

Mortgage rates may be on the rise but it’s not all bad news for borrowers as they can still find an abundance of options to help them save on the upfront cost of their deal. Mortgage fees have fallen on average on fixed deals, and there are now more fee-free offers available. Weighing up a deal on its true cost is vital, particularly as the rate gap between average fixed rates with a product fee and those without has reduced.

Due to the changes in the mortgage landscape borrowers may find themselves better off by looking beyond headline-grabbing fixed initial rates, especially as interest rates continue to rise. Indeed, back in September 2021, there were various lenders offering sub-1% mortgage deals, but that same month the average mortgage fee was just £16 shy of the record high recorded in 2012. Low rate fixed mortgages can carry some of the highest fees, so they may not be the best choice for every borrower, so seeking independent advice to assess the overall deal is wise.

Remortgage customers could stand to make substantial savings by switching their mortgage, and those who may be cash-strapped can find fee-free offers as well as deals that cover their legal fees, valuation or even pay cashback to help with upfront costs. First-time buyers can also stand to benefit from these incentives if they have exhausted their savings.

In the months ahead, it will be interesting to see how mortgage lenders will adapt their ranges to appeal to both new borrowers and their existing customers during the cost of living crisis.


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