Homeowners warned of soaring mortgage fees
Mortgage lenders are hiking their application fees on fixed-rate deals, as homeowners flee for the security of fixed rate mortgages, according to financial website MoneyExpert.com. It states that the average application fee has increased 18.5% since the Bank of England first raised interest rates last August.
At the same time, the number of products that now come with a fee of more than £750 has risen sevenfold from 13 to 93. There are now just 251 loans with fees of less than £500.
However, a second study by online mortgage firm mform.co.uk shows that intense competition in the mortgage market is keeping a lid on fixed and discounted mortgage rates, despite the cost of borrowing increasing.
Rates on these types of loans have risen by just 0.135% on average, in the wake of each 0.25% increase in the base rate.
Eamonn Rice, chief executive of mform.co.uk, reportedly said: "There's been panic about the best mortgage deals disappearing, but our analysis shows there are still good value deals to be had.”
However, Rice urged borrowers to look beyond interest rates at the true cost of a mortgage before switching. |
