UK mortgage borrowers can expect competitive rates but higher fees

Banks are likely to start innovating to help homeowners who secured deals on 1% or 2% years ago and are facing hefty increases in monthly payments. Photograph: Victoria Jones/PA

UK homeowners and buyers can expect a rash of mortgage deals with eye-catching rates but a sting in the tail from higher fees as banks try to find ways to attract more business against a backdrop of 5%-plus interest rates.

With the Bank of England opting on Thursday to keep interest rates unchanged at 5.25% for a second meeting in a row, and with most analysts believing they will stay at or around that level for some time, some mortgage brokers predict more product innovation over the coming months as home loan providers compete to entice borrowers and hit their lending targets.