Mortgage fees soar

In an increasingly competitive industry, mortgage purchasers might be being tricked into paying massive fees by deceptive advertising, a financial service website reports today.

According to Moneyfacts.co.uk, lenders have increased their fees by over 600 per cent in the last two years, with no difference in the amount of work being done by them to sell the house.

A common technique by lenders to artificially enhance their position in mortgage ‘league tables’ is to switch their own charge to the arrangement fee, thereby making them appear to be able to highlight a lower general interest rate.

Therefore customers – who naturally tend to focus on the headline interest rate as a guide to their decision – pay more than the advertising suggests, a situation which a spokesperson for the website today termed “objectionable”.

Mortgage brokers advise prospective buyers to include the range of payments, including lender’s fees, rather than just focussing in on the interest rate.

Tags: work, interest rate mortgage, business, mortgage brokers, technique, headline, arrangement fee, decision