Whilst mortgage rates currently being offered have never been lower, borrowers have been hit with an increase in fees as lenders look to recoup profits, according to new research from Moneyfacts.co.uk.
Borrowers are currently having to pay more to arrange a mortgage, with the average mortgage fee £68 higher than in June 2014 – a 21-month high. Some lenders are even charging up to £7,500 for some high value loans.
The research found that the average mortgage payment is £956, up from £924 in February last year. The average fee for a two-year fixed mortgage on 8 February was 2.52%, down from 3.13% a year ago.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The current mortgage market boasts some of the lowest rates on record, which is great news for borrowers, but the increase in the average mortgage fee clearly shows that some of these headline grabbing rates are being compensated for elsewhere.
“Some of the fees borrowers are being asked to pay are nothing short of shocking, with up to £7,499 being charged for some high value loans.
“While arrangement fees allow lenders to offer a lot more flexibility within their ranges, the cost of administering the mortgage does not vary that greatly from one case to the next, which could lead many to wonder why there is such a big difference between the fees charged and why they are even charged in the first place.”
