Best mortgage offers are being affected by lenders increased fees
The best mortgage offers are being affected by lenders pushing up their mortgage charges. For borrowers it is not enough to just look at rates when making mortgage comparisons, fees should be factored in too.
New research suggests that fees have risen by around 70 per cent to offset the cost of lower and less profitable mortgage deals. Figures compiled by the financial information provider Moneyfacts, reveal that the average mortgage fee is £1,498 which is up from £889 a year ago. This massive increase is adversely affecting lenders best mortgage offers.
Mortgage arrangement fee costs are sometimes labelled by lenders as booking, completion or administration fees. Research by consumer group Which? found that the average cost in November 2005 for a mortgage fee was £411, which is around £1,000 less than the figure today.
In the past, lenders would charge a fee to cover the costs they incurred administering the mortgage. But today many lenders rely on fees to bring in extra revenue and so have increased them dramatically. While borrowers with big deposits have seen some of the most drastic falls in mortgage rates in the last year, they have seen some of the largest mortgage fee increases.
Sylvia Waycot of Moneyfacts has said that 'Increasing fees is a way for banks and building societies to boost revenues, particularly if they are cutting rates on new deals. Researching the best mortgage offers should not just include the headline rate, but also set-up charges as these can significantly increase the overall cost of your loan.'
