The average mortgage fee in the UK increased by around £600 (S$1,185.57) in 2011, with home buyers holding larger deposits facing the steepest increase, according to comparison website Moneyfacts.
The usual mortgage arrangement fee is £1,498 (S$2,959.97), up from last year’s £889 (S$1756.62). However, the increase is smaller for low-deposit loans sought out by first-time buyers.
Moneyfacts said the average fee for a 60 percent loan-to-value (LTV) mortgage has soared by 42 percent to £1,562 (S$3,086.43), while the fees on 90 percent and 95 percent loans climbed 11 percent to £893 (S$1,764.52) and £995 (S$1,966.07) respectively.
Borrowers with a 25 percent deposit face a 65 percent increase compared to last year, with usual fees at £1,599 (S$3,159.54).
The mortgage fee increased despite lenders providing some of their lowest ever mortgage rates, with the Bank of England keeping the base rate at a historic low of 0.5 percent.
“In the excitement of buying a house, it is easy to ignore arrangement fees but this could be a costly mistake, especially if the fee is added to the mortgage loan,” said Sylvia Waycot, a spokeswoman at Moneyfacts.
“Researching the best mortgage deal should not just include the headline rate but also set-up charges and the incentives such as free legal fees.”
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