29 Nov

Mortgage fees have 'nearly doubled in two years'

Mortgage fees have 'nearly doubled in two years'

Mortgage fees have nearly doubled over the last two years, new research has shown.

Figures from Moneyfacts.co.uk show that the average flat arrangement now stands at £827 - up from just £441 in November 2005.

The financial website's research also found that more and more lenders are opting to introduce percentage fees, with some charging up to 3.5 per cent.

A fee pegged at this rate could see a charge of £4,550 on a loan of £130,000.

David Knight, mortgage analyst at Moneyfacts, said: "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."

In spite of the trend, however, borrowers can still find deals that do not carry the charges, he added, but must be more savvy about the criteria they use to select their loan.

Mr Knight said: "The increase in fees may not automatically mean the cost of the deals has increased. What it does mean is the maze which borrowers need to navigate to get the best deal has become more complicated.

"Unfortunately too many borrowers still focus their initial attention on getting the best rate, without taking full consideration of the true cost of the deal."

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