Home > Loan news archive > Rising mortgage fees prompt caution over loans

Rising mortgage fees prompt caution over loans

15 February 2005

Charcol has revealed figures that show mortgage arrangement fees have increased on average by 42 per cent in the last six months.

The fee that mortgage lenders charge borrowers to take out competitive loans stood at £339 in July 2004 - with that figure now up to £480.

With so much competition in the mortgage market and as consumers become more financially savvy, lenders are searching out new ways to make profits, as Ray Boulger, senior technical manager at Charcol, explained.

"The UK mortgage market is arguably the most competitive in the world. This competition has been hugely beneficial to the consumer," he commented.

Charcol's research found that fees increased, on average, 53 per cent since the start of 2004, with well over three-quarters of this jump occurring in the second half of the year.

Mr Boulger advised: "With regards to features, the general message to borrowers is don't pay extra for features you won't use but, for borrowers who will make use of them, there is a wide choice of mortgages offering varying degrees of flexibility."

He concluded that it was "very easy" for borrowers to succumb to lenders' advertising and urged them to be scrupulous when choosing a loan.