Application fees on fixed-rate mortgages rise

By MoneyhighStreet Staff. Published on June 12, 2008 This post currently has no comments.

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It is becoming more and more expensive for people to take out fixed-rate mortgage deals, a new report has warned.

Analysis by MoneyExpert.com suggested that 323 of the fixed mortgages currently available charge application fees of £750 or more, compared to just the 22 that did so in September 2006.

This means that over a third (34 per cent) of all fixed-rate mortgages now have a significant application fee.

What''s more, the level of these fees has also risen. In September 2006, the typical fixed-rate mortgage application fee was £517.19. Now, this figure has increased 66 per cent to £860.25.

"Such high mortgage application fees will come as something of a shock to many homebuyers. We''re just not used to these levels of charge," commented Sean Gardner, director of the financial site.

"Lenders are sick to death of risky borrowers and they won''t be taking any chances in the near future. That means high fees, high interest rates and very little manoeuvrability when it comes to negotiating your mortgage."

Recently, Moneyfacts.co.uk suggested that five-year fixed-rate mortgages were likely to become even more popular.