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Be careful of those hidden mortgage fees

Although mortgage rates are at an all-time low, you still have to watch very carefully just how much extra banks are charging in an array of fees that can be disguised in many ways. In the last five years it has been found that fees charged by banks have doubled to around £1,600 using various levies described by one researcher as sneaky.

Consumer magazine “Which” in a recent study carried out by them, said that there were 40 different ways in which set up fees could be charged by banks and only 3% could correctly identify the cheapest deal on a list of mortgages that they were asked about. What this means of course is that although you may think that you have got a good mortgage deal, you could be thousands of pounds out of pocket!

Although mortgage rates are falling thanks to a war between banks, it is easy to be locked into a deal that is poor due to the set up fees. These fees can be charged a number of times before the mortgage is finalised and they come under a variety of names including: “administration fees”, “application fees”, “assessment fees”, “arrangement fees”, “booking fees”, “product fees”, “reservation fees”, “lenders’ fees”, “completion fees” and “mortgage questionnaire fees”.

As a rule of thumb it is suggested that for larger sum you are better off with low rates, whilst smaller mortgages should look for low fees.

Picture: David Plas

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