Sharp rise in mortgage arrangement fees

According to a recent report there has been a dramatic rise in the amount that lenders are charging by way of arrangement fees on mortgages, with some arrangement fees having doubled over the past year, adding significantly to the total cost of taking out a mortgage.

Since the onset of the credit crunch, which swept across the country last year, many consumers have found it more difficult and more expensive to get a mortgage, which has resulted in a slump in lending levels, with lenders tightening up on their mortgage lending criteria and consumers unable to afford to take out a mortgage.

Some mortgage arrangements fees have rocketed by 96% over the past year according to recent reports, and this is on top of rises on interest rates applied by the lenders, despite three base rate cuts since December.

One official said: ‘After all the panic of recent weeks in the mortgage market, people may be tempted to grab the best deal they can and focus on rates to the exclusion of everything else. They could be in for a nasty shock when it comes to the fee which is charged as they have rocketed in the past year.’