Mortgage Fees "rise 17% over the last 12 months"

The average mortgage arrangement fee has increased by 17% over the last 12 months, research by "Moneyfacts Group" has revealed.

It means that the average fee has increased by £151 over the last 12 months from £879 to £1,030. There are many fees that far outstrip the average; however, with the highest fee on the market is being £3,800, which is being charged by Accord Mortgages through selected intermediaries. The lender with the dubious honour of charging the highest percentage arrangement fee is Precise Mortgages at 2.00%. There are some mortgages that don't charge an arrangement fee but they are very much at a premium, with only 12% offering this luxury.

"Lenders appear to be offsetting the low mortgage rates on offer by increasing the arrangement fees," commented Michelle Slade, spokesperson for Moneyfacts Group. "The average arrangement fee has increased by 17% as lenders battle it out to offer the lowest headline rate. Percentage fees have become increasingly common, with one lender charging as much as 2%. 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. In many cases a low rate with a high fee can work out more expensive than opting for a slightly higher rate, but with a lower fee".

This is exactly where our mortgage sourcing here at MDS Sutton comes into it's own. We research the "best" deal for you based on what you are looking for and then the total cost of the deal over the period in question.