Borrowers pay a pounds 250 arrangement fee once they have completed the loan, but escape paying a valuation fee, application fee, solicitor's conveyancing fee, land registry fees and local search fees.
Ian Darby, marketing director at John Charcol, said the typical cost of all these fees on a pounds 50,000 loan would be pounds 976.
The loan, which comes in an exclusive deal with the Bank of Ireland, is at 6.99 per cent until 1 November 1998.
Mr Darby admitted that the package could only be put together by squeezing the period to less than five years, and restricting the loan to those borrowing less than 75 per cent of the value of the property.
Those wanting to borrow between 75 and 95 per cent are being offered a loan at the same 6.99 per cent, but it only runs until March 1997, and borrowers have to pay the mortgage indemnity premium that guards the lender against losses. This would amount to pounds 975 on a pounds 90,000 loan on a pounds 100,000 property, and could be added to the loan.
Mr Darby said: 'We believe we will be able to help thousands of borrowers around the country not to lose out on what are likely to be looked back on as extremely competitive interest rates.'
Even if there is an interest rate cut the scope for rates to go lower is limited. Many borrowers believe that the time has come to take a fixed rate, but are deterred by the costs.
NatWest and TSB have both launched 10-year, fixed rates at 7.59 per cent.
John Charcol: Freephone 0800 800 440Reuse content