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.

Mortgage Choices "improve for First Time Buyers"

Reported in Saturday's "Financial Times":

"The mortgage market for first-time buyers is slowly improving as more lenders launch innovative products and house prices become more affordable. But the criteria for granting loans are still tough, mortgage brokers have warned.

According to the Council of Mortgage Lenders, the number of first-time buyers taking out mortgages hit a ten-month high in June - up 24 per cent from May, to a total of 18,100 loans. Last week, Halifax also reported that the number of towns in which first-time buyers can afford property is at its highest since 2003. Research from the mortgage lender found the average house price in June was affordable for someone on average earnings in 48 per cent of all local authority districts, compared with 40 per cent in 2010, and just 6 per cent in 2007".

Fixed Rates Continue to Fall to Record Lows

According to "Moneyfacts" today: " Lenders continue to cut fixed mortgage rates in an attempt to get borrowers to switch away from their variable rate deals.

Their latest research has revealed the average five-year fixed mortgage rate has fallen below 5% for the first time since records began in 1988. While the average five-year fixed mortgage rate has stood as high as 6.24% (in September 2009) in the 29 months since bank base rate has been at 0.50%, rates have decreased to 4.99%. At the same time, the average two-year fixed mortgage rate has fallen from 5.18% in September 2009 to 4.24%, while the average three-year fixed rate has fallen from 5.61% to 4.74%.

With the cost of funding fixed rate mortgages through the swap rate market having fallen to an all time low, Michelle Slade, spokesperson for Moneyfacts, said this is being passed on to borrowers through some of the lowest mortgage rates ever seen. "Lenders are trying to tempt borrowers off variable rate deals and onto fixed rate deals as they are concerned about some borrowers' ability to repay their mortgages when rates finally start to rise," added Ms Slade. "A proportion of borrowers on variable rate deals will have absorbed the savings they have made from lower repayments into other monthly expenditure, meaning affordability will become a problem when rates go up."

Rate increase from Nat West / RBS

It's been a while since we have seen any increases.... but news this afternoon:

You may have read about world wide influences on "SWAP" rates as markets might be moving deposits from the Euro and US Dollar and sterling keeps it's AAA rating?

However, at MDS in Sutton; we have heard this afternoon that the bank owned 83% by UK tax payers (RBS) is increasing it's 2 year fixed rate for purchases and re-mortgages (with a 25% deposit), tomorrow from 3.19% to 3.39%.

Maybe a sign of things to come?

Let's face it, every day we read something different about what might be happening today and what it may mean for the future!

Why not review your situation NOW and see if your finances could be future proofed?