UK banks and building societies increasing mortgage fees

Just as you thought that the mortgage crises could not get any worse in the UK, we here that a number of UK banks are now increasing their mortgage fees. Buying a property is now more expensive, and you have to wonder if things will get even worse. Just 18 months ago 22 out of 806 fixed rate mortgages in the UK or 3 percent charged a set up fee of £750, that has now changed to 323 out of 939 deals, which is 34 percent charging the same sort of fee. In the past the mortgage arrangement fee was just £100 to £200 on an average, now the average is £806.

For those who are looking to take out a large mortgage, your fees could rocket up to £3,500. Sean Gardner, who is the director of MoneyExpert.com has said “Lenders are being incredibly cautious at the moment and high arrangement fees are just a reflection of the ongoing effects of the credit crunch.” He also added “Getting a mortgage in the current climate is not easy – even if you have overcome the need for a large deposit and you can afford a high rate of interest on your loan, you’ll still need a serious sum of money to pay the various fees. This is all part of the filtering process for cautious lenders who just refuse to expose themselves to any kind of risk while the credit crunch runs its course.”

People who now wish to get on to the property ladder are now facing a tougher time, what with the scrapping of a 100 percent mortgage, so borrowers now have to put a larger deposit down, as well as higher costs on an arrangement fees. Many first-time buyers will now have to put down at least 10 percent, in some cases this could be as much as 25 per cent.

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