Mortgage fees rocket by 20% by Finance News Bulletin

Published: 27/02/07

information Companies & markets Investing Power portfolio Campaigns Mortgages & homesMortgage featuresInsurance Consumer advice Broadband & phones departure Saving & banking Credit & loans Small commerce Tax & wills Message boards Money blog Tools & calculators Ask an specialist Guides contrast & buyHomeowners hit by a triple whammy of interest rate rises have also had to contend with mortgage cost rising by almost a fifth since last summer

TAKE PART IN OUR SURVEY Tell us what you think of This is Money and help form our future (you could even make £35)A ONE-MINUTE MAKEOVER If you only have one minute to study how to sort your finances, forget the rest and read this>> Our 8-step planThe price of remortgaging has risen substantially since the first of the store of England's three recent rate rises, with cost rocketing by 185% since the price of borrowing first rose in AugustResearch by financial comparison website Moneyexpert showed that lenders have pressed up homeloan cost as interest rates have risen, with the number of products with a charge of more than £750 increasing from 13 to 93

Meanwhile, the number of mortgages with fees under £500 slipped by more than a quarter from 349 to 251The increase in the price of loans has come during a period when the price of borrowing has risen from 475%, last August, to currently stand at 525%

The rise in the cost of mortgage cost has led to accusations that lenders are captivating advantage of borrowers whose cheap fixed rates have ended, while still contribution attractive headline ratesSean Gardner, chief executive of MoneyExpert said: 'Homeowners are frantic to fix their mortgage rates to keep away from incurring further costs caused by rising interest rates It's the sensible alternative as further rises aren't out of the query'However, banks aren't stupid and fees should be in use into consideration if you're looking to switch

'You could incur exit and application fees just for moving supplier so check before you commit These can be hefty and may mean the dissimilarity between staying put and moving on'The best fixed and tracker rate mortgage deals on the marketplace come with hefty cost and borrowers should work out the full cost of their mortgage over the initial deal era before committingFor example, a homeowner looking for a two-year fixed speed contract should compare loans by working out how much repayments will price over that 24-month period with fees added

The general rule for loans with fixed cost is that the bigger the mortgage the more advantage a cheap rate-high charge offer will be, but this is distorted by some lenders who charge percentage of loan feesThe number of near to the ground fixed rate deals available have fallen considerably following the most recent rate rise, in January, and experts have warned those looking to remortgage to a low fixed rate to act almost immediately and watch out for hidden chargesRay Boulger, of agent John Charcol, said: 'Borrowers who think that bank rate will go up to at least 6%, and those who just want or need the security of knowing what their journal payments will be, still have a few short term fixed tax to decide from below 5%, but all clean or non stepped set rates for more than two years are now priced in excess of 5% Indeed, only this week two main lenders with very competitive fixed tax pulled them only four days after they were launched

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