Negotiation, Negotiation, Negotiation

UK Property Investment news and comments from Mark Harrison of

UK Mortgage Arrangement fees have gone up 87% in the last two years

Posted by markharrison on November 28, 2007

According to a report by Moneyfacts, over the last two years, the average mortgage arrangement fee was:

  •  £441 in November 2005
  • £827 now

That’s an increase of over 87%, which is getting close to having doubled.

The trend behind this has been of lenders wanting to quote low headline rates, but make up their profits by charging such fees. About the worst culprit was Northern Rock,  who have been charging such fees as 3.5% on some mortgages.

In September 2006, I wrote an article on the impact of fees, which was beginning to grow then. You can

What I said at the time is still true. Iwrote:

The way that I decided to treat the fees was to treat them as short-term loans, that had to be paid off during the course of the mortgage.

The difference, of course, is that those fees have got much, much bigger in the interim.

The conclusion I came to last year is something I also still stand by:

You can probably guess the punchline – I STRONGLY recommend that you go and see an independant financial advisor to present you different mortgage options…

… but I also recommend that you sit down with him/her and ask them how they are treating fees when comparing different products.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: