Application fees for mortgages and remortgages have risen sharply over the last eighteen months,
new research from a leading website comparison service has found. Mortgage Strategy revealed
that the survey had found that the average application fee for a mortgage or remortgage increased
by around £100 between September 2009 and March 2011.
Fees for fixed and tracker deals increasing by £100
Over the eighteen month period, fees for tracker deals increased by £118 (a rise of 15 per cent)
whilst fixed rate product fees rose by an average of £97 (a 14 per cent rise).
Mortgage Strategy reports that ‘in recent years many lenders have been increasing application and
booking fees in order to offer lower headline rates while maintaining margins.’
In addition, the data shows that booking fees have risen slightly over the last 18 months, by £7 for
tracker products and £9 for fixed products.
Borrowers should remember to take fees into account
When shopping around it is vital that consumers take both the interest rate and any fees into
account before making a decision. That’s the advice of Clare Francies, mortgage spokeswoman at
the website who conducted the research. Ms Francies says the different pricing structures used by
lenders can be very confusing for consumers.
“It’s vital that prospective mortgage customers look beyond the headline rate and dig a little deeper
to find out the true cost of the mortgage, otherwise they may end up paying back more than they
bargained for.
“People often forget to look at the total cost and simply focus on the interest rate and what their
monthly repayments will be when comparing mortgages. They fail to factor in the impact of the fee.
“Borrowers need to shop around to make sure they get the right mortgage to suit their needs.”
