Lenders need to reduce arrangement fees on mortgages
August 7, 2008
Alistair Darling, the Chancellor of the Exchequer, has issued a stark warning to banks and lenders – to reduce extortionate arrangement fees on mortgage loans and stop ripping consumers off. This comes after a recent report that lenders have been hiking up arrangement fees on mortgages, and that some have even doubled over the past year or two, with others being hiked up more recently.
One industry official recently said: ‘Such high application fees will come as something of a shock to many homebuyers. We’re just not used to these levels. The days of fee-free mortgages are over and frankly getting anything under £1,000 is something of a coup. With stamp duty reaching an average of £4,950 per property, moving home is becoming more and more expensive.’
There are now over three hundred mortgages charging mortgage arrangement fees of over £750 whereas just two years ago there were only around twenty two that charged this much. Some lenders, such as Abbey, charge a huge arrangement fee of over £2000 for those that do not put down a large deposit and have recently said that the fee will have to be paid upfront. HSBC has also hiked the fees on its Rate Matcher mortgage, with some customers being charged up to £10,000.
Darling has been in talks with the Financial Services Authority over what is classed as a fair fee, and he said: ‘I’m very concerned that people ought to be treated fairly, especially people coming off fixed rates and going onto different rates. We have met the Council of Mortgage Lenders to try to reach an agreement to ensure that people are treated fairly, but if that isn’t happening I will ask the FSA to pursue the matter.’
He went on to state: ‘Everybody accepts there are costs that have to be met when they change over, but I think we have to make sure people are treated fairly and are not taken advantage of.’
Recent additions:
- Four billion added to fuel poverty rescue bill
- Ridley gets no payoff from the Rock
- Thousands of consumers claim lost money
- Alliance and Leicester launches account for over 50s
- The right mortgage advice could save consumers a fortune
Related Articles
- Mortgage fees on the up Recent reports in the UK have indicated that a number of lenders have increased their mortgage arrangement fees by tremendous levels over the past two
- Mortgage fees have rocketed in two years According to a recent report the upfront fees that are charged by mortgage lenders have rocketed over the past two years, with many fees actually
- Mortgage exit fees to be scrapped According to recent reports, mortgage exit fees, which were being charged by many mortgage lenders when the loan was repaid, are to be scrapped following
- Mortgage fees soar over two year period According to a recent report mortgage fees in the UK have soared over the past two years. Experts claim that many of the upfront fees
- Mortgage fees from HSBC to be halted until end of September HSBC is trying a new tactic to try and tempt consumers to take out a mortgage with them. One of the leading UK High Street
Comments
Got something to say?