"Lenders may well be cutting fixed rates to enticing lows, but not all borrowers will be drawn in by the initial rate alone."
A growing proportion of the mortgage market now offers cost saving incentives such as a free valution or no product fees, according to research from Moneyfacts.
Its figures show that 69% of fixed rate mortgages now come with a free valuation and 50% offer free legal fees.
41% of fixed mortgages on the market today charge no product fee and of those that do, average fees have fallen from £1,047 in December 2018 to £1,022 today.
Rachel Springall, finance expert at Moneyfacts, commented: “Lenders may well be cutting fixed rates to enticing lows, but not all borrowers will be drawn in by the initial rate alone. Indeed, there could be borrowers who want to save on the upfront cost of the deal, such as with product fees or paying out on other fundamentals.
“Remortgage customers, in particular, may be considering a new deal if they are on a variable rate because of the fixed mortgage rate war. It is entirely possible that these same borrowers are looking to switch from their current lender. They may then wish to avoid paying hundreds of pounds in the run up to Christmas to pay fees to secure a new mortgage deal, whether it be a product fee, instructing a valuation or appointing a solicitor. First-time buyers can also benefit from this type of bundle too.
“It’s encouraging to see growth in the proportion of fixed mortgage deals that offer a free valuation, however borrowers must keep in mind that this is usually a basic valuation compared to if they were to instruct their own surveyor for a more comprehensive estimate.
“At the same time, while half of the fixed mortgage market offer free legal fees, some borrowers may feel more comfortable to appoint their own solicitor. However, by using an incentive bundle, these separate costs can be saved.
“Weighing up the overall true cost of a mortgage is essential, as the right deal depends on how much someone is looking to borrow and for how long. If in doubt, borrowers would be wise to seek independent financial advice to navigate the mortgage maze.”