Homeowners shop around, but for the wrong reasons

Only 40 per cent of homeowners are placing major importance on the size of fees when choosing a mortgage.

The worrying finding from moneysupermarket.com's most recent Mortgage Map survey shows 74 per cent of homeowners are fixated on the interest rate.

Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "It’s of grave concern that homeowners are placing most importance on low interest rates. With fees having shot up over the past 12 months, people need to factor in the true cost of a mortgage rather than be tempted by the rate.

"For example, someone with a Yorkshire Building Society mortgage at 4.99 per cent would pay £1,200 more over two years than someone with Britannia at 5.94 per cent. It’s almost natural instinct for borrowers to believe a lower interest rate is better, but that isn't always the case."

The Mortgage Map research also found just 22 per cent of homeowners placing major importance on good customer service.

Louise Cuming added: " It’s amazing there is such little regard is paid to customer service. Anyone who ever falls foul of increased mortgage payments will then realise just how important customer service is.

"It’s good to see people shopping around though. The survey found 60 per cent of homeowners chose their last mortgage either by comparing several options from different providers, searching online or going to a broker."