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Mortgage Lenders Cut Interest Rates in a Struggle for Your Business – Just Beware of ‘Honey Bee’ Loans

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Experts expected prices to persevere to decline in light of a price war that escalated between banks and building societies in recent months.

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When the Hinckley & Rugby Building Society introduced its mortgages of less than 1% in April, it was the first on the market since the pandemic began final year.

But since then, banking giants and smaller building societies have joined the less than 1% market to attract unused borrowers and take advantage of the rising demand for real estate.

Kevin Roberts of Legal & General Mortgage Club said: “Increasing price competition among mortgage lenders is distinguished news for borrowers and provides an opportunity for many to decrease their monthly payments.

“But it’s still essential to get the right advice when you’re looking for a mortgage, because finding the best option isn’t just about looking for the lowest rate.” Here are some details you need to take into consideration.

Early Payment Fee

Brokers have reported that a growing number of customers are returning mortgages beforetime to make the most of record low rates, even if they have to pay beforetime repayment fees on their existing loans. In some cases, the savings realized over the life of a less than one-piece loan can outweigh the beforetime repayment fee.

But in other cases, these fees can cost borrowers thousands of pounds.

A person with a five-year deal on a £250,000 mortgage could collect nearly £11,000 if they moved into their home or changed their mortgage prior the loan term expired, according to Legal & General.

“For those who want to move into their homes soon, this fee should be of particular interest,” Roberts said. “However, when we asked borrowers what drove them toward a particular mortgage, nearly two-thirds said price was the most significant consideration, and only one in ten considered exit fees.”


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