12 Jun

1,368% increase in fixed-rate mortgage fees

1,368% increase in fixed-rate mortgage fees

The number of fixed-rate mortgages with application fees of £750 or more has soared by as much as 1,368 per cent in the last 18 months, according to MoneyExpert.com.

Its research found that in September 2006 there were 22 fixed mortgage deals charging over this figure. That has now grown to 323 fixed products, or 34 per cent of the total fixed-rate market.

Meanwhile, over the same period, average application fees on fixed mortgages rose by 66 per cent, from £516.19 to £860.25.

For example, Halifax now charges its customers with homes worth between £500,000 and £2 million a £3,999 fee for a three-year fixed-rate deal.

"Such high mortgage application fees will come as something of a shock to many homebuyers," Sean Gardner, director of MoneyExpert.com, commented.

"We're just not used to these levels of charge," he added.

In another blow to borrowers, Abbey recently announced that new customers opting for products with a 95 per cent loan-to-value ration will no longer be able to add the application fee onto their mortgage.
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