Too good to be true mortgages don't exist, warns Moneyfacts

01 November 2006
Financial advice website has warned consumers to be wary of mortgage deals that seemingly have 'too good to be true' interest rates as they are frequently subject to hidden fees.

Darren Cook, head of mortgage research for the site, said lenders are increasingly in competition with one another to offer the lowest headline rate they can in order to generate new business.

However, this most likely means that high fixed charges, such as valuation and arrangement fees, will be applicable in order for the lender to offset any losses it will incur as a result of offering a market-leading rate.

"Don't be lured by low interest rates," Mr Cook cautioned. "If the deal looks too good to be true, it often is.

"Choosing your mortgage deal is one of the biggest financial decisions of your life. Take the time to do your homework, shop around and make sure you get the right deal for your circumstances."

Even with a poor credit history it is still possible to get a foot on the property ladder. To read more about subprime mortgage products, click here.

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