Mortgage lender set up fees have soared 70.3%
in the last four years, according to recent research.
The average fee a lender charges for a mortgage was £899 in March 2009 when base rate fell to 0.5% but is now £1,514.
The average fee for a two-year fixed mortgage is now £1,595 and the average fee for a five-year fix is £1,014.
The highest fee is an eye-watering £3,990 charged for a five-year fixed rate product.
There can be no logical reason why fees should have increased so much. In the space of just August and September alone, they have increased by an average of £42.
Mortgage administration costs cannot possibly have increased 70%. Dealing with lenders on a daily basis as I do, I can certainly vouch that their service delivery standard hasn’t improved on the back of it – on the contrary in some situations , it has in fact worsened, so why are fees so high?
It is possible that lenders are keen to push fees because they are pure income and they get the money at the start of the mortgage.
But don’t forget, paying a large fee doesn’t necessarily guarantee a better rate – it all comes down to loan size. For example a percentage based fee can work well on the smaller mortgage sums against a set fee structure, but for a larger loan it is the other way round.
If you are unsure,
talk to someone like myself who can guide you as what is the best thing to do.The average fee a lender charges for a mortgage was £899 in March 2009 when base rate fell to 0.5% but is now £1,514.
The average fee for a two-year fixed mortgage is now £1,595 and the average fee for a five-year fix is £1,014.
The highest fee is an eye-watering £3,990 charged for a five-year fixed rate product.
There can be no logical reason why fees should have increased so much. In the space of just August and September alone, they have increased by an average of £42.
Mortgage administration costs cannot possibly have increased 70%. Dealing with lenders on a daily basis as I do, I can certainly vouch that their service delivery standard hasn’t improved on the back of it – on the contrary in some situations , it has in fact worsened, so why are fees so high?
It is possible that lenders are keen to push fees because they are pure income and they get the money at the start of the mortgage.
But don’t forget, paying a large fee doesn’t necessarily guarantee a better rate – it all comes down to loan size. For example a percentage based fee can work well on the smaller mortgage sums against a set fee structure, but for a larger loan it is the other way round.
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