The best fixed-rate mortgage deals have fallen back below 5% but many lenders are charging high upfront arrangement fees, a financial website said today.

Nearly one in 10 of the most competitive two-year fixed-rate deals are now below the Bank of England base rate of 5.75%, while Yorkshire Building Society is offering a rate of 4.99%, according to online mortgage company

The group said swap rates, which fixed-rate mortgages are based on, had fallen by around 0.15% recently, enabling lenders to offer eye-catching deals.

But it warned many lenders were charging high upfront fees, often based on a percentage of the total amount borrowed, which pushed up the true cost of the loan.

Cheltenham & Gloucester is currently offering a two-year fixed-rate loan of 5.29% and one of 6.33%. But fees on the 5.29% deal add up to #4,249 for someone borrowing #150,000, while ones on the 6.33% rate are just #99 and borrowers get given #400 cash back.

This means that even though repayments on the lower interest rate are far lower at #661.25 a month compared with #791.25 for the 6.33% mortgage, the true cost over two years is actually lower for the higher rate at #18,689, compared with #20,119 for the 5.29% offer.

Francis Ghiloni, marketing and business development director of, said: "Cheaper fixed rates are on the way which will be a relief to many and particularly those whose current fixed deals are coming to an end.

"However lower headline rates do not necessarily mean lower costs for borrowers. Some of the low initial APRs are only made possible by high upfront fees. Borrowers need to focus on the true cost of their loan.

"Many lenders are now offering loans where the fees are based on the size of the advance. Borrowers need to be rate smart when comparing mortgages."