Mortgage fees climb to new high

Fella

"The average mortgage arrangement fee has soared to £1,522...."

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9981929/Mortgage-fees-climb-to-new-high.html

Time was you could easily get a mortgage without a fee at all. I wonder how many people who fix for say 2 years appreciate just how much extra in interest a £1500 fee would equate to. Presumably not many since basically what's happening is the banks are whacking money onto the fee in order to advertise misleadingly low rates.

(it does help certain posters on here to make spurious claims about how affordable mortgages are though)

Anyone who re-mortgages regularly over the course of their mortgage is being hit for a huge amount in stealthy fees.

michaels

When I am remortgaging I just look at the total interest plus fees and costs payable over the term I am likely to hold the mortgage (generally the special rate period) and choose the cheapest. I can't believe anyone else would do it differently?

Edit: Sounds like a new misselling scandal though 'I was too stupid to realise that although I chose the lowest headline rate it wasn't necessarily the cheapest mortgage - now compensate me'. Perhaps banks will be limited to only offering two mortgage products, a 'standard rate' and a 'fixed rate' and similarly mobile phone companies will have to switch to a single tariff charging per minute used/text sent and have to display only these prices rather than having 'bundle' contracts.

grizzly1911

Fella wrote: »

"The average mortgage arrangement fee has soared to £1,522...."

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9981929/Mortgage-fees-climb-to-new-high.html

Time was you could easily get a mortgage without a fee at all. I wonder how many people who fix for say 2 years appreciate just how much extra in interest a £1500 fee would equate to. Presumably not many since basically what's happening is the banks are whacking money onto the fee in order to advertise misleadingly low rates.

(it does help certain posters on here to make spurious claims about how affordable mortgages are though)

Anyone who re-mortgages regularly over the course of their mortgage is being hit for a huge amount in stealthy fees.

Been at it for decades.

Fella

grizzly1911 wrote: »

Been at it for decades.

Fees have existed for decades but actually during the boom most places were so keen for business they dropped them. In contrast to now when they're at an all-time high. So a substantial difference.

grizzly1911

Fella wrote: »

Fees have existed for decades but actually during the boom most places were so keen for business they dropped them. In contrast to now when they're at an all-time high. So a substantial difference.

I wasn't aware they had dropped them to that extent. Not surprising the feeding frenzy was so out of control.

Add on a MIG fee and they aren't going to get any cheaper.

Graham_Devon

grizzly1911 wrote: »

I wasn't aware they had dropped them to that extent. Not surprising the feeding frenzy was so out of control.

Add on a MIG fee and they aren't going to get any cheaper.

Not only dropped them, they gave YOU cashback. The role was completely reversed in the boom.

robmatic

I will be remortgaging in the summer and it looks like I will be able to fix for 5 years at less than 3% APR and with no arrangement fee to pay.

Graham_Devon

robmatic wrote: »

I will be remortgaging in the summer and it looks like I will be able to fix for 5 years at less than 3% APR and with no arrangement fee to pay.

Yes, but you are always a winner rob, like many others on here, no matter what.

Doesn't mean the overall picture is changed.

Mr._Pricklepants

I don't see the issue.

As michaels says above, you need to look at total cost and not just headline rate.
If one is too dumb to do that, one shouldn't get a mortgage.

wotsthat

michaels wrote: »

When I am remortgaging I just look at the total interest plus fees and costs payable over the term I am likely to hold the mortgage (generally the special rate period) and choose the cheapest. I can't believe anyone else would do it differently?

I thought everyone did that. When people pay large fees I assume it's because overall it works out cheaper for them.

Just looked at Nationwide 4 year fix 2.79% available to me with no fees.

marathonic

Agree with others. Looking at the average fee is meaningless.

Is a £1,345 fee expensive when, for example, taking out a £500,000 mortgage with Yorkshire Building Society fixed for 5 years at 2.59%?

In this case, if you were paying more than about 2.65% for a 5-year fix with no fee, then you're better off stumping up the £1,345.