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30 Apr 2017

Go Direct Personal Finance News  2009

Mortgage fees rise as rates fall

Moneyfacts research reveals that whilst mortgage interest rates are falling and higher loan-to-values (LTVs) are making a comeback, potential savings are being eaten away by the less talked about, rising fees.

The average mortgage fee has risen by £112 since the start of the year and, at £1,522, is the highest recorded by Moneyfacts in 25 years.

The rise is in direct correlation to the celebrated recent return of higher LTVs and widely published fall in interest rates. 


Average fees across all mortgages

Jan-13

£1,410

Feb-13

£1,436

Mar-13

£1,412

Apr-13

£1,522

Source: Moneyfacts.co.uk

Average 2 YR Fixed Mortgage

 

 90% LTV

 90% LTV  fee

75% LTV

 75% LTV fee

 60% LTV

60% LTV fee

Jan-13

5.12%

£921

3.98%

£1,531

3.95%

£1,694

Feb-13

4.75%

£934

3.91%

£1,583

3.85%

£1,694

Mar-13

4.61%

£945

3.62%

£1,539

3.59%

£1,727

Apr-13

4.59%

£1,423

3.50%

£1,736

3.50%

£1,692

Source: Moneyfacts.co.uk

 

 

 

 

 

 

 

Average 5 YR Fixed Mortgage

 

 90% LTV

 90% LTV  fee

75% LTV

 75% LTV fee

 60% LTV

60% LTV fee

Jan-13

4.27%

£929

4.47%

£964

4.26%

£1,364

Feb-13

5.10%

£933

3.70%

£981

3.47%

£1,447

Mar-13

4.96%

£746

3.62%

£940

3.27%

£1,479

Apr-13

4.94%

£1,433

3.54%

£1,258

3.22%

£1,268

Source: Moneyfacts.co.uk

 

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“It’s easy to get caught up in the excitement of heavily marketed mortgages that shout about low interest rates, but beware that they will often be at the expense of high fees.     

“The average fees charged have risen by almost 8% since January, though it is hard to justify how setting up costs can possibly have risen by this much.

“Mortgage lenders that are enjoying cheap funding for lending, courtesy of the Government, must be seen to be opening up the market to new borrowers and reducing rates will help with this message.     

“Rates are only a part of the story; high upfront charges such as fees can easily be overlooked and yet their impact across the life of the mortgage can turn a cheap deal into a costly one and therefore should always be considered. 

“If the Government is serous about re-kindling the mortgage market with its Funding for Lending Scheme, it should ensure all its subscribed lenders offer mortgages that exclude hiked up charges that are hidden behind low rates.”

Moneyfacts Group

Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

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