Fixed-rate mortgages with percentage fees ‘to peak’

The number of mortgages with fixed rates and fees linked to a percentage of the amount taken are close to peaking, it has been stated.

Andy Pratt, the chief operating officer at Alexander Hall, said the number of these on the market will “probably” rise, although this figure is close to “saturation point”.

He added: “It will maybe come down again later when more competition comes into the market.”

Mr Pratt commented that the reason for lenders opting for such fees is that it is “just another way of increasing or protecting their margin”.

Those keen on remortgaging may wish to see whether such a fee leaves them better off or not.

A study by MoneyExpert.com revealed recently that 49 per cent of fixed-rate deals now come with a percentage-based fee.

This compares with 43 per cent a year ago, with the number rising from 405 such products to 472 in that time.

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