More lenders are offering free valuations and free legal incentives to borrowers.
A larger proportion (69%) of the fixed mortgage market now offer a free valuation, Moneyfacts has found.
Borrowers looking for a free legal fee incentive, such as remortgage customers, will find that half of the fixed mortgage market can accommodate them in this instance.
Rachel Springall, finance expert at Moneyfacts, said: “Lenders may well be cutting fixed rates to enticing lows, but not all borrowers will be drawn in by the initial rate alone.
“Indeed, there could be borrowers who want to save on the upfront cost of the deal, such as with product fees or paying out on other fundamentals.
“Remortgage customers, in particular, may be considering a new deal if they are on a variable rate because of the fixed mortgage rate war.
“It is entirely possible that these same borrowers are looking to switch from their current lender.
“They may then wish to avoid paying hundreds of pounds in the run up to Christmas to pay fees to secure a new mortgage deal, whether it be a product fee, instructing a valuation or appointing a solicitor.
“First-time buyers can also benefit from this type of bundle too.”
Mortgage product fees across fixed deals, on average, have fallen year-on-year, down from £1,047 in December 2018 to £1,022 today.
Meanwhile, 41% of fixed mortgages on the market charge no product fee at all.
These changes suggest that lenders no longer just compete on rate but will also tailor their product fees and incentives to entice borrowers too.
Springall warned that a free valuation or free legals may not be as good as what the borrower could pay for.
She added: “It’s encouraging to see growth in the proportion of fixed mortgage deals that offer a free valuation, however borrowers must keep in mind that this is usually a basic valuation compared to if they were to instruct their own surveyor for a more comprehensive estimate.
“At the same time, while half of the fixed mortgage market offer free legal fees, some borrowers may feel more comfortable to appoint their own solicitor.
“However, by using an incentive bundle, these separate costs can be saved.
“Weighing up the overall true cost of a mortgage is essential, as the right deal depends on how much someone is looking to borrow and for how long. If in doubt, borrowers would be wise to seek independent financial advice to navigate the mortgage maze.”
