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Homeowners 'fixated on interest rates'

The majority of UK property owners place the most importance on the interest rate when taking out a mortgage, a new survey has revealed.

Moneysupermarket.com's latest Mortgage Map shows that 74 per cent of homeowners use interest rates as a basis for choosing between different home loans.

However, consumers could potentially end up paying more overall if they ignore the additional fees included with most mortgages, the financial comparison site warned.

Head of mortgages at moneysupermarket.com Louise Cuming said that the findings were "of grave concern", adding: "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."

She continued: "It's almost natural instinct for borrowers to believe a lower interest rate is better, but that isn't always the case."

The average arrangement fee for a mortgage in the UK is now £827, according to a recent report from Moneyfacts.co.uk. Personal loans can take the pressure off homeowner finances.

See how much you could borrow with a home loan from Lombard Direct.

© Adfero Ltd

29/11/2007 17:13:35

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