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Lender fees complicating mortgages, says Which?

Lenders are charging customers a total of 39 different types of fee, which has made it much more difficult to compare mortgages than in the past, according to Which? Money.

The consumer champion has found that both the number and the level of fees has gone up since the financial crisis, with four in five two-year tracker mortgages at 90 per cent loan-to-value charging over £900 in set-up fees in 2010, compared to one in five in 2007.

Set-up and additional fees can include anything from booking, administration, arrangement and valuation fees, to charges for falling into arrears, changing from interest-only to repayment and even for choosing to take out your buildings insurance with someone other than your mortgage provider.

Most lenders now charge more than 20 types of additional fee, with Newcastle Building Society leading the way on 29, closely followed by Ipswich Building Society – 28 – and several others on 27.

Which? Money editor James Daley says: “Finding the right mortgage used to be as simple as looking for the best rate but the array of fees nowadays has made it a much harder task – it’s never been more difficult to understand how much your mortgage is going to cost you.

“Lenders should make it clear what the total cost of a deal is so borrowers can make easy comparisons.”

In November, Which? launched a free mortgage advice service for its members and their family and friends.



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Sounds to me that which have realised picking the best mortgage for a client is not that easy

  2. Welcome to the real world Which?

  3. Does this have anything to do with promoting their own “commission” based “free” mortgage service I wonder?

    I find it hard to take the concerns of “Which” about such fees so seriously when Which” is offering a “free” service to it’s members by accepting “commission” from the very same lenders when offering their so called “free service”.

    Agree it would be nice if lenders charged simpler fees but then is this a “free market” and will it not “stifle” competition, which are often arguments used to justify such practices.

    You need to decide what a “free market” is first in my view and at the same time what “regulation” is really about.

  4. If you had done your research before turning into mortgage advisers, you migh have picked up on this long ago, as the saying goes “stick to what your good at”

  5. Kevin Grannersby 24th January 2011 at 9:39 am

    What completely spurious data from Which!

    So organisation (a) has more fees listed on its menu than organisation (b). Big deal!

    Given that Which don’t appear to have done any research into the actual nature and value of the fees themselves, this is meaningless PR pap.

    Of course, it’s a complete coincidence that Which have recently launched their own mortgage advisory service, isn’t it?

  6. Which should stay with what they know !! errr only im not sure what that is !! they used to be realy good at recommending BEST BUY ENDOWMENTS.

  7. And look where that got the industry !! maybe they used the same type of ! errrr Reseach !!

  8. My client needs advice on which fridge freezer is most energy effiicient but he needs one with a drinks cooler, frost free and ice cold. I was thinking of discussing it with my solicitor. He is a professional advisor after all and it is just simple advice that he requires to make the correct choice. He will want a 42″ LCD TV soon may be I could discuss that one with his psychiatrist?

  9. I wonder what sourcing system Which use? What about ALL the small lenders who aren’t on any sourcing system, who IFAs & brokers know about & use for clients because they are more flexible & tend to think outside the box.

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