Mortgage swings and roundabouts

Over the past year we have seen a shift in the way lenders source their profits from rates and fees.

The average best rate on a two year fixed rate deal from the major lenders has risen from 5.73 per cent last August to 6.15 per cent now. However, the average best fee for a two year fixed has dropped from £2,149 to £1,334.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "Lenders do not have to rely on headline rates to hook borrowers in at the moment. Often a great headline rate has come with an extortionate fee, but lenders are being much more transparent now about the true cost to the consumer and where their profit comes from.

"Higher rates might seem unpalatable for some people, however those lower fees can make it cheaper for borrowers on a smaller mortgage. Consumers must look at both the fee and the rate if they want to work out the best deal for them."