Bradford & Bingley has launched its Remortgage Challenge while warning mortgage holders to "read the small print" of remortgaging promotions by other mortgage brokers.
The mortgage lender said this week that it is only worth taking up promotions from banks and building societies which offer cash if they cannot match or better other rates, if money will be saved in the long run.
Mortgage development manager at Bradford & Bingley, Duncan Pownall, said: "On the surface challenges such as those promoted by NatWest and Nationwide appear a winning proposition, however, on closer inspection it could turn out to be a losing one for the borrower.
"Lowering monthly repayments is easy to achieve and is futile unless it ultimately saves the borrower money over the term of the deal.
"There could be a number of instances where a borrower actually ends up paying more because of the amount of fees they have to pay."
Bradford & Bingley found that customers remortgaging to NatWest's two-year fixed rate deal could lose £212 because of arrangement fees, despite being given £150 cash as part of their mortgage price challenge.
The building society is offering lower arrangement fees and competitive interest rates as well as £100 if they cannot better the existing mortgage offer.
According to a recent survey by the Council of Mortgage Lenders (CML), remortgaging increased by 15 per cent in August to its highest level since October 2003.
The CML predicted that the surge in remortgaging was probably due to lower interest rates and people remortgaging at the end of their two-year fixed rate deals.To read more about Mortgages, click here.
© Adfero Ltd