Consumer champion Which? has urged Chancellor George Osborne to bring an end to ”sneaky” mortgage fees and charges that often leave borrowers confused over which deal is best for them.
Research from Which? found more than 40 different fees and charges in the mortgage market, ranging from set-up fees and arrears fees to application fees and final repayment fees.
Further, the research found that average arrangement fees have almost doubled in the past five years, rising from £878 in 2009 to £1,588 in 2014.
In many cases, lenders use different names for the same fee – an application fee can also be called a booking fee or reservation fee.
Which? says the array of charges and fees blur the true cost of a mortgage to borrowers, meaning they often do not know which is the best deal for them.
Just 3 per cent of people surveyed by Which? could identify the cheapest of five two-year fixed rate mortgages and the consumer champion is now calling for Osborne to use his Autumn Statement to speak out against the trend.
Which? executive director Richard Lloyd says: “Homeowners could be paying over the odds for their mortgage because of the complex range of fees and charges that prevent them from finding the best deal.
“The Chancellor must act now to stop sneaky fees and charges and end mortgage confusion for consumers. The Government and the regulator should also explore better ways of presenting the total cost of mortgages.”
More than 37,000 people have lent their support to the Which? campaign.
A breakdown of the various charges and fees currently applied by UK lenders can be seen below:
Fees charged before (set-up fees) – Administration Fee, Application Fee, Letting Property Fee, Assessment Fee, Chaps Transfer Fee, Arrangement Fee, Insurance Fee, Reservation Fee, Mortgage Reference Fee, Product Fee, Booking Fee, Revaluation Fee, Reinspection Fee, Lenders Fee, Withdrawal Fee, Completion Fee, Mortgage Questionnaire Fee.
Fees charged during the length of the mortgage – Porting Fee ,Transfer of Title Fee,Arrears Fee,Arrears Letter Fee,Conversion of Mortgage Type Fee,Copy Statement Fee, Deeds Enquiry Fee,Unpaid Standing Order Fee,Mortgage Term Change Fee,Solicitor Arrears Fee,Repossessed Property Fee,Unpaid Direct Debit Fee,Unpaid Cheque Fee,Unpaid Ground Rent Fee,Arrears Breakdown Fee
Fees charged at the end of the mortgage – Mortgage Account Fee,Mortgage Exit Admin Fees Total,Deeds Release Fee,Release of Part Security Fee,Redemption Admin Fee,Final Repayment Fee,Sealing Fee,Redemption Fee.
