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.