A cheap rate mortgage or a higher rate with no costs?

 

When you go shopping for a mortgage you're bound to face a

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decision between choosing a ( pet insurance ) cheap interest rate mortgage or a higher rate mortgage with no, or very low, up front costs.

We've all seen them in the ( home insurance quotes ) national press and on the Internet - mortgages with incredibly low interest rates. Lenders know that it's a low interest rate that pulls in the punters so they bust a gut to out do their opposition. The only problem is that these super low rates mean that the ( travel insurance ) lenders have to recover some of their money in other ways. High arrangement fees is a classic solution.

Arrangement fees are charged to cover the cost of administering the mortgage application and ( Car insurance quotes ) reserving the mortgage monies. Sometimes these fees can be added to the mortgage and sometimes they have to be paid upfront. And they can vary greatly, not only between lenders but even between the mortgages offered by the same lender.

Most arrangement fees are in the £399 to £699 range and clearly work out cheaper for ( online car insurance ) larger mortgages. But some lenders such as the Stroud & Swindon Building Society, charge 1% fees on top of some of their mortgages. On a £150,000 ( unsecured loans ) mortgage that's a whacking £1,500! Not to be taken lightly!

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