|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    21st of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

Mortgage News feed Mortgage News

All Financial News feed All Financial News

Lenders convert to “percentage” arrangement fees

Bookmark and Share

by Gill Montia

New research from MoneyExpert.com indicates that mortgage lenders are keener than ever to apply fees based on a percentage of the loan they are providing.

Application fees have become something of a scandal in the credit crisis, with banks and building societies applying levels that make headline rates nonsensical.

The charges have offered a convenient method of increasing margins for lenders, many of whom will add the fees to the total mortgage debt, sometimes increasing the cost of a loan by thousands of pounds.

In particular, MoneyExpert is warning those remortgaging to take account of such charges and be aware that over the past twelve months there has been a 14% rise in the number of products demanding a percentage rate.

According to the price comparison website, mortgages with percentage fees now account for 49% of the market, with lenders charging between 0.4% and 2.5% of the value of the loan.

In addition, only 4% of products in this category place a cap on the fee, leaving people borrowing large sums of money exposed to extremely heft charges.

The study also reveals a decrease in the number of fixed-rate deals charging a set fee, from 57% to 51%.

However, the highest charge on the market has soared, from £1,999 in 2008 to £2,499 today.

Discuss this in the Finance Markets forums

Story link: Lenders convert to “percentage” arrangement fees

News posted: September 7, 2009

Financial Services:

Related financial stories to: Lenders convert to “percentage” arrangement fees:
Previous: «
Next: »

Visited 1326 times, 1 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Tags: ,