Fees rise on sub-prime mortgages
Published On 29 January 2007
Fees for sub-prime mortgages have risen markedly in the past six months, according to new research.The average fee on a sub-prime home loan has risen from £813 to £923, some 13.5 per cent, between July 2006 and today, a study by MoneyExpert.com claims.
Furthermore, the number of sub-prime mortgages that charge a fee in excess of £1,000 increased by 46 per cent over the same period, negating the headline interest rate holds that have enticed many borrowers with poor credit ratings
These figures are compounded by the insistence of one in five mortgage lenders that they are set to increase fees further during the coming year.
Sean Gardner, MoneyExpert.com's chief executive, said: "Many people rely on sub prime mortgages, from the self-employed to people who have very poor credit ratings.
"High arrangement fees can skew the effective rate of interest you'll get on your mortgage, so don't pay the price for poor research," he added.
Some 70 sub-prime mortgages have interest rates below the current 5.25 per cent base rate, the research claims.
