Mortgage News

Buyers 'should be wary of high mortgage fees' - 28/11/2007

Excellent! Very Good Good Fair Poor

Why not be the first to rate this article?

High mortgage arrangement fees can hike the cost of low-rate deals, it has been noted.

Borrowers have been warned by price comparison website Moneyfacts.co.uk to be aware that rates should not be the only factor in a mortgage decision and to assess the arrangement fee when choosing a loan for house purchase.

The website has pointed out that the average mortgage arrangement fee has grown more expensive, rising from £441 in November 2005 to £827 today - a statistic that the organisation noted is relevant to people coming off two-year fixed-rate deals at the moment.

"Thousands of borrowers coming off a two-year fixed rate will be bracing themselves for higher interest charges, with the best deals over one per cent higher than in 2005. But they will also need to prepare themselves to pay much higher fees, with the average fee rising 100 per cent," said mortgage analyst David Knight.

Mr Knight explained that more people are using percentage fees now in comparison with two years ago, with nine per cent of all prime mortgages imposing a fee of between 0.2 per cent and 3.5 per cent.

He gave the example of Northern Rock, which charges the highest fee of 3.5 per cent that would add £4,550 to a loan of £130,000

Sarah Robson, press officer for the Council of Mortgage Lenders, has predicted that a base rate fall next year may ease payment pressures for some people.

© Adfero

Back to Index