Charcol finds that low mortgage rates are not always best value

06 January 2005
The size of the loan, not the interest rate charged, is the major factor in achieving the best value mortgage, independent broker Charcol has found.

Elliot Nathan, product development manager at Charcol, noted: "Many people who are arranging a new mortgage make the mistake of focusing just on the rate, or just on the up-front fees, without considering the size of their borrowing.

"In general terms, those with a large mortgage should look for lower rates, while those with smaller loans should be more influenced by fees. That said, there is certainly no definitive answer, so if borrowers are unsure of which way to go, they should seek advice.

"For some time now, we have warned against borrowers taking very low rates that have extended redemption penalties, but it is not just these deals that borrowers need to be wary of. Doing your sums on all types of loan, even if they look competitive at first glance, is very important to ensure you get the very best value from a mortgage."

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