99.5pc fail to work out the true cost of a mortgage But Which? said 81pc of 2,803 mortgage deals on the market now came with set-up fees. Richard Lloyd, Which? executive director, said: "While it's good to see lenders now offering lower interest rates, mortgage arrangement fees have risen dramatically in the last two years making it increasingly important for borrowers to understand the overall cost. Our research shows that even people who already have a mortgage struggle to recognise the cheapest deal. Lenders should be more transparent about the true cost of mortgage so that borrowers can more easily compare deals and find the best one for them. Which? said that mortgage providers were increasingly also slapping charges on after the sale, such as storing deeds to fees for being in arrears or over-paying. Ipswich Building Society charges £35 for a bounced cheque or failed direct debit. A quarter of lenders charge no administration fee when closing down a mortgage, but charge up to £195 to send deeds back to a homeowner. Sue Anderson from the Council of Mortgage Lenders said consumers do not usually have to make their choices based on the "very limited information" that Which? provided. She said the important issue raised by the research was the limitations of the APR. Although the APR is a useful tool, it cannot be used in isolation from the other important disclosures about cost. Which? asked consumers to rate the deals on offer only for cost over the period of the special deal; the APR, on the other hand, is designed as a comparison tool for the long-term cost of the mortgage," she said. Can you calculate the cheapest two-year fixed-rate mortgage deal? Which is the cheapest deal over two years on a £100,000 loan? Deal 1 - Initial rate 1.74% with fees of £1,545. The overall APR is 5.2%. Deal 2 - Initial rate 1.79% with fees of £1,999. The overall APR is 3.8%. Deal 3 - Initial rate 1.99% with fees of £1,500. The overall APR is 4.0%. Deal 4 - Initial rate 2.24% with fees of £295. The overall APR is 4.6%. Deal 5 - Initial rate 2.29% with fees of £995. The overall APR is 4.3%. Footnotes: Participants asked to calculate cost of mortgages on interest-only basis. Overall costs listed assume mortgage applicants pay fee upfront rather than adding to mortgage loan. Source: Which? Money.