Mortgage selection 'becoming more complicated'

Posted: 10 Mar 2009 12:04:27 GMT

The recent falls in the base rate have led to a great deal of excitement over the possibility of picking up cheaper mortgage deals but a statement from the price comparison website moneysupermarket.com has suggested that in fact the market is becoming more intricate.

Mortgage lenders are now offering a greater range of deals based on a wider mix of fees and repayment combinations, the website stated, meaning the research borrowers have to do to ensure they are obtaining the best deal has increased dramatically.

A mortgage deal with a monthly repayment rate of 3.5 per cent and a fee of £2,000, for instance, could work out to be as expensive as a deal which offers no fee and a repayment rate of 4.5 per cent, said Louise Cuming, head of mortgages at the website.

Ms Cuming said this "mortgage minefield" could lead to fewer first-time buyers entering the market in the near future, as they choose to remain in the security of the rental sector until the market clears up.

She commented: "People will often forget to take into account how much remains on the mortgage - and will simply look at the monthly repayments and the fee when comparing - or worse still, only look at the monthly cost."



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