A report by Which? has revealed that mortgage lenders have increased their fees by 70% over the last three years.
Lenders charge potential clients a fee which covers the cost of administering a mortgage. Fees can include a survey fee, a lenders product fee, arrangement fee and personal financial advice.
Currently the housing market is changing constantly with property prices increasing one month and the next they can fall. The hike in lender fees has made it even more difficult for first-time buyers and homeowners who are looking to remortgage their property. A low rate mortgage deal is offered to the consumer but they are then faced with higher lender fees which results in the mortgage deal becoming more expensive than they originally thought.
The report has shown that mortgage fees have increased since 2009 from £878 to £1,479 but in the last year alone it has increase by a third from £1,099. Homeowners looking to remortgage and first-time buyers are being urged to find the best mortgage deal which has the lowest cost when it comes to lender fees.
It was also found that some lenders were charging different fees to their customers. However some lenders have already started to raise their variable rates and have been offering competitive fixed rate deals.
Which? commented: “The rise in mortgage fees has made it more challenging to choose the right mortgage deal, as picking a loan with the lowest interest rate could prove a false economy if the loan comes with high fees.”
Ian Donaldson Managing Director of Autonet Insurance commented: “The hike in mortgage fees over the past three years is not surprising compared to how much car and van insurance has risen as well. Mortgage lenders will hopefully bring their fees back down to make the cost a little more reasonable for first-time buyers or homeowners looking to remortgage.”
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By Amanda Bainbridge