Soaring costs of mortgage fees hits homebuyers hard; PERSONAL FINANCE.
Research from mform.co.uk revealed that since 2003, the typical mortgage application fee has jumped by 125.6 per cent, from pounds 281 to pounds 634.
And homeowners switching their loan to another lender have seen redemption charges almost doubled over the same period.
The typical homeowner would now have to pay a pounds 202 exit fee compared to pounds 106 three years ago.
Faced with pressure of delivering headline grabbing mortgage rates, providers have increasingly turned to higher redemption charges as a way of recouping losses, according to the research.
In 2003, none of the main lenders charged more than pounds 200 in standard redemption fees, but more than two-thirds do today.
Eamonn Rice, chief executive of mform.co.uk, said: "When choosing a mortgage, it is very important to look beyond the headline rate.
"Some of those with the lowest rates have the highest application and exit fees and the least flexible terms and conditions."
Ray Boulger, senior technical manager at John Charcol, said the move towards higher fees was a result of increased competition in the marketplace.
He said: "Exit fees are something most people would not take too much into account and therefore it is an easy thing for lenders to squeeze up."
But the mortgage expert added that higher arrangement fees could, if accompanied by a highly competitive rate, be a good thing for the right person.
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|Publication:||The Birmingham Post (England)|
|Date:||Dec 9, 2006|
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