Mortgage application fees rise 15% in the last 18 months

The application fees charged by lenders for their mortgage products have risen by just over 15% in the last 18 months.

Data reveals the average application fee ( the fee that is paid by the applicant for a given interest rate) has increased by around £100 between September 2009 and March 2011.

Over the period, fixed product application fees rose by £97 on average, an increase of 14%, while fees for tracker deals increased by £118, a hike of 15%.

In recent years many lenders have been increasing application and booking fees in order to offer lower headline rates while maintaining margins.

The analysis shows booking fees ( the fee that is paid by an applicant at the point of application to secure a given interest rate) have risen marginally over the last 18 months, by £9 for fixed products and £7 for tracker products.

The different pricing structures used by lenders can be very confusing for consumers.

So it’s vital that prospective mortgage customers look beyond the headline rate otherwise they may end up paying back more than they bargained for. People often forget to look at the total cost and simply focus on the interest rate and what their monthly repayments will be when comparing mortgages. They fail to factor in the impact of the fee.

Borrowers need to shop around to make sure they get the right mortgage to suit their needs.

This is where employing the services of a mortgage intermediary (broker) can help.

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