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Mortgage fees leap by 27%

The average mortgage fee has increased by 27 per cent to £1,502 in the last three years, according to Moneyfacts.co.uk.

Its research shows although most residential mortgage rates have continued to fall in most cases from three years ago, fees are the highest since Moneyfacts’ records began over 20 years ago. The average fee is now £1,502 compared with £1,181 in March 2009.

The research shows there are 2,612 products on the market compared with 1,452 in March 2009, a rise of 80 per cent.

The number of 90 per cent loan-to-value products has risen by 238 per cent from 89 in March 2009 to 301. The number of 85 per cent products increased from 169 to 452, up by 167 per cent, while 75 per cent LTVs rose by 56 per cent from 429 to 670.

On average, two-year fixed rates have fallen from 4.79 per cent to 4.6 per cent and five-year fixed rates have fallen from 5.62 to 4.82 per cent.

Two-year trackers are up slightly from 3.54 per cent to 3.62 per cent while lifetime trackers have fallen from 3.95 per cent to 3.71 per cent.

A Moneyfacts.co.uk spokeswoman says: “The number of mortgage deals has increased but fees are at their highest since our records began, so consumers need to check the true cost of any mortgage offer.”

Emba group sales and marketing director Mike Fitzgerald says: “I think the FSA should look at this because it looks as though lenders are increasing their fees just to make some easy cash.”

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