Consumers 'should look beyond headline mortgage rates'

Date:Tuesday 28th April 2009
Author: Susanna Kavka

Consumers seeking to find the best deals on mortgages should look beyond headline rates, according to advice issued by one industry practitioner.

Tom Girling, mortgage manager at Yorkshire Building Society, claimed people should examine such things as arrangement fees, valuation fees and any cash-back offers that lenders advertise when selecting a home loan.

He said: "The headline rate of a mortgage isn't necessarily an indication of what a mortgage will actually cost the consumer."

Mr Girling went on to suggest that while a new deal being offered by Yorkshire Building Society comes out only ninth in the top ten mortgages in terms of its headline rate, it is in fact the second best deal in the market for consumers when other costs are taken into account.

Recently, Alliance & Leicester launched a new two-year tracker mortgage deal set at the base rate plus 2.45 per cent. The deal comes with an arrangement fee of £499.