Shocking hikes in fixed rate mortgage fees
New research from Moneyexpert.com reveals an alarming hike in mortgage fees over the last 18 months.
Before the credit crunch only 22 fixed rate mortgage deals had applications fees and these were from £750 upwards. Now 323 fixed mortgage deals charge a fee and Moneyexpert.com say that equates to 34 per cent of the fixed mortgage market in the UK.
It gets worse! - not only have the number of fixed rate mortgages charging fees increased but the fees have also rocketed. The average application fee was £517 in September 2006 but now this figure stands at an average of £860 - an incredible 66 per cent increase! The highest stipulated fee was £1,499 with a Halifax 2 year fixed rate mortgage for people with a 25 per cent or more deposit. Today the Halifax charge a fee of £3,999 for a 3 year fixed rate mortgage 3 year fixed rate mortgage for existing customers whose property is worth £500,000 to £2 million.
This seems like a kick in teeth for existing Halifax customers, you’re hit with a £4,000 fee as a reward for your loyalty, nice…
Director of MoneyExpert.com, Sean Gardner, said: “Such high mortgage application fees will come as something of a shock to many homebuyers. We’re just not used to these levels of charge.”
“Anyone looking to remortgage or to buy a property for the first time will need to recalculate their options if they haven’t factored in fees. The days of fee-free mortgages are over and frankly getting anything under £1,000 is something of a coup. And with stamp duty reaching an average of £4,950 per property moving home is becoming more and more expensive.”
“Lenders are sick to death of risky borrowers and they won’t be taking any chances in the near future. That means high fees, high interest rates and very little manoeuvrability when it comes to negotiating your mortgage.”