Mortgage fees falling

Following the news that First Direct is to reduce the arrangement fees for all offset mortgage products, analysis from moneysupermarket.com has found that arrangement fees across all fixed and tracker mortgages have fallen by around 25 per cent over the last year.

Hannah-Mercedes Skenfield, mortgage channel manager at moneysupermarket.com said: "This is a welcome move by First Direct, which brings its arrangement fee down to a more palatable level. Borrowers however, still need to be vigilant as often the devil is in the detail; generally products with the lowest interest rates attract the highest fees.

"We have seen a significant drop in the average fees on mortgages over the last year but this has been driven by lenders not passing on the benefit of the significant drop in the cost of funds by charging higher interest rates.

"Borrowers need to shop around to make sure they are getting the best deals on both rate and fees."