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Derin Clark

Online Reporter
Published: 17/11/2020
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The cost of getting a mortgage has risen since March, with average product fees increasing while the number of deals with no product fees or offering free valuations falling.

Research carried out by has found that the average product fee has risen from £1,040 in March to £1,078 at the start of November. As well as this, during this same time period, the proportion of deals with no product fees has fallen, from 40% of deals in the market in March to 34% of deals in November, along with the percentage of deals offering free or refunded valuations, which fell from 71% of the market to 69% of deals in the market. This means that at the beginning of November, there were just 705 mortgage deals that do not charge product fees and 1,414 offering free or refunded valuations.

There was some good news for mortgage borrowers however, as the percentage of deals offering free or refunded legal fees has increased since March. In March, 49% of deals within the market offered free or refunded legal fees, which increased to 54% in November, which means that in November 1,115 of deals offer free or refunded legal fees.


Fixed mortgage market analysis
  March 2020 October 2020 November 2020
Average product fee (excluding deals with no fee) £1,040 £1,067 £1,078
Deals with no product fee 1,780 (40%) 649 (34%) 705 (34%)
Deals with free/refunded legal fees 2,157 (49%) 1,018 (53%) 1,115 (54%)
Deals with a free/refunded valuation 3,145 (71%) 1,294 (68%) 1,414 (69%)


Commenting on the increase in average product fees, Eleanor Williams, finance expert at said: “The average fee charged on a fixed rate mortgage deal (excluding products with no fee) has increased for the fifth consecutive month, and at £1,078 is the highest on Moneyfacts’ records since November 2012, when it reached £1,095. This may be a result of lenders raising fees as a means to gain additional margins in an environment where these were already slim following the significant fixed rate war of recent years.

“Those who are looking to limit any outlay involved in taking on a new mortgage should note that the proportion of the fixed rate market where there are no fees payable has fallen slightly. At 34%, this is 6% lower than the percentage of the market that offered this type of deal in June and 8% lower than November last year, but it is positive to see that despite the reduction, fee-free fixed deals are still available.”

Mortgage rates rising month-on-month

Meanwhile, although average rates on deals with and without fees have fallen since March, month-on-month, average rates are rising. In March, the average rate on a fixed mortgage deal with a product fee was 2.89%, and this had fallen to 2.72% in October but has risen to 2.80% in November. Similarly, the average rate on a mortgage deal without a product fee was 2.80% in March, falling to 2.69% in October and then increasing to 2.74% in November.


Average mortgage rates
  March 2020 October 2020 November 2020
Average rate (deals with fee) 2.89% 2.72% 2.80%
Average rate (deals with no fee) 2.80% 2.69% 2.74%


Although average mortgage rates have risen, fixing into a mortgage deal will still leave the majority of mortgage borrowers better off than being on the lender’s standard variable rate (SVR), as Williams explained: “Those who chose to fix now could not only protect themselves from further potential rate increases – compared to the average SVR of 4.44%, borrowers could save over £132* per month, which over two years could reduce outgoings on mortgage payments to the tune of over £3,000 and fix their monthly payments in the process. This is encouraging news for borrowers who may want to adjust their monthly outgoings and reduce costs where they can.”

Mortgage borrowers looking to get the best possible deal for their circumstances should consider speaking to a mortgage broker who will be able to offer help and advice about the best deal for them.


*Based on £150,000 mortgage balance over a 25-year term, approximate monthly payments calculated at a rate of 4.44% versus 2.80%.

The best mortgage deals

To compare all the fixed mortgage deals visit our two, three and five year fixed rate mortgage charts.


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