Thrifty Loans

Over recent months the mortgage market has experienced huge levels of turmoil, with both lenders and consumers being affected.

Lenders have found it more and more difficult and expensive to secure finance to fund their lending, and consumers have seen the cost of mortgages rocket despite three base rate cuts, as well as seeing tighter lending conditions, fewer mortgage products, and increased difficulties in being able to get a mortgage.

A recent report has suggested that the problems may be even worse than anticipated, as a shocking report has shown that those looking to take out a mortgage or remortgage could be facing set up fees of up to £5000 in some cases.

A new deal called Rate Matched from HSBC, which matches the cheap fixed rates that many consumers are due to come off over the coming months within specified limits, charges up to £5000 by way of an arrangement fee.

The report also shows that the arrangement fees on other mortgage have close to doubled over the past year. Figures showed that in March last year the average set up fee for the most competitive three year fixed rate mortgage was £578 but this has now rocketed to £1132 reflecting a 96% rise. Two year fixed rate arrangement fees have gone from an average of £999 to an average of £1478.

One industry official said: ‘After all the panic of recent weeks in the mortgage market, people may be tempted to grab the best deal they can and focus on rates to the exclusion of everything else. They could be in for a nasty shock when it comes to the fee which is charged as they have rocketed in the past year.’