Borrowers desperately looking for a new mortgage are being urged to check the overall cost of their loan before signing up to the cheapest rate, after research revealed upfront fees have nearly doubled over the credit crunch.

The average arrangement fee on the best two-year fix rate mortgage has soared from £999 to £1,478, while typical fees on three-year fixes have risen from £578 to £1,132, according to an analysis by Mform, an online broker.

Deals that look cheap may be anything but, once fees are factored in.

Cheshire building society has a two year fix with a market leading headline rate of 4.49 per cent. However, the upfront charge on the Cheshire deal is a hefty £1,499. Monthly repayments on the loan for a borrower with a £150,000 mortgage work out at £920 on a 25-year repayment mortgage. Over the two-year term, the cost of the deal for a borrower with a £150,000 loan would be £23,484.

A two-year fix from Mansfield building society with a higher headline rate of 5.5 per cent but a lower fee of £999 works out cheaper over the term. Repayments work out at £921 a month but over two years the deal would cost £23,106 with the fee – £377 less expensive than the Cheshire deal.

The trend among lenders to offer low rates with high fees was evident when HSBC launched its rate matcher deal for remortgages. On a loan of £250,000 the lender is offering to match rates as low as 4.54%, however borrowers will have to come up with £4,099 upfront to secure the deal.

Francis Ghiloni, of Mform said: "After all the panic of recent weeks in the mortgage market people may be tempted to grab the best deal they can and may focus on rates to exclusion of everything else. They should be focusing on the true cost of their loan.”