UK Mortgage Arrangement Fees See Phenomenal Rise
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The hidden fees charged by mortgage lenders have often been a point of contention for many consumer groups and borrowers across the UK. However, new research from personal financers has revealed some startling increases in mortgage arrangement fees over the last two years.
Their study concludes that some mortgage arrangement fees have gone up six fold in the last two years. For instance, Intelligent Finance - a subsidiary of Halifax - saw its mortgage arrangement fee rise from £499 to £2999 in this period: that's a hike of 600 per cent.
Lisa Taylor from Money Facts Ltd commented:
"Lenders know that people tend to judge mortgages based on the headline interest rate. Consequently, they can use this to offer what appears a good home loan only then to introduce the arrangement fee as a sting in the tail."
So if you're looking for a mortgage, how do you go about ensuring you receive the most competitive interest rate while still avoiding high mortgage arrangement fees? A simple browse through a reputed mortgage best-buy table or a search on a consumer comparison site online is likely to yield the most competitive mortgage deals out there. Compare the Best UK Mortgages here
But once you've found a mortgage that seems to suit your financial situation well, make sure you find out what their mortgage arrangement fee is before you make your mind up. You can do this online whilst applying for a free quote. For instance, it's possible that the mortgage with the most competitive rate of interest will charge you in excess of £2000 in arrangement fees, while another mortgage deal with a slightly higher rate of interest will only charge you £500. In the long-term, this could mean significant savings. And with Bank of England interest rates having experienced a steep upward turn over the last 12 months, you'll want to make sure you can save every penny possible.
Author - Paul McIndoe - finance advisor in London
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