Spotlight On: Co-op's fixed-rate mortgages

The deal

The Co-operative Bank yesterday cut rates on its fixed rate mortgages by up to 0.6 per cent.

The good points

Two-year fixed rates now start at 3.39 per cent with five-year deals from 4.19 per cent. The bank has an ethical stance, meaning your money isn't used to damage the planet, fund the arms trade or slavery, or harm animals, for instance.

The bad points

If you want the best deals, you'll have to stump up an enormous £999 fee. Fee-free deals start from 3.59 per cent for two years or 4.49 per cent for five years.

Conclusion

Charging a fee to arrange a mortgage is a trick to make the deal seem cheaper when the cost may be the same or more then the higher fee-free rate. Lenders need to stamp out this practice so borrowers can compare deals easily.

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