Bailed-out bank Lloyds TSB is offering a new three-year mortgage - but it could cost you thousands of pounds more than the cheapest deal, our research found.
Lloyds says its Easy Step loan is "designed to ease the financial pressure of buying a home". It offers a low 2.59% rate for the first year but jumps to 5.59% for the next two.
You'll need to pay a 25% deposit and a whacking £995 arrangement fee. The deal would cost someone borrowing £100,000 a total of £16,765 over the three years.
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That works out more than £3,000 more expensive than RBS's gimmick-free, threeyear deal fixed at 4.39%.
David Hollingworth, from mortgage broker London & Country, warned: "It is important not to get sucked in by a cheap headline rate. The key is to look at the overall cost of the deal - including fees - to see which is cheapest."
Lloyds also launched an Easy Step deal for buyers with a 40% deposit. It starts at 2.49% but jumps to 5.49%.
That makes it £2,747 more expensive than a three-year fixed-rate of 4.24% currently offered by First Direct.
Source: mirror.co.uk
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