Borrowers given further mortgage fee warnings

Britons have been warned that both arrangement and application fees could hit them on their latest deals due to lenders' increased propensity to charge more for their services.

Moneyfacts.co.uk has revealed that the average arrangement fee for a mortgage has almost doubled over the past two years, with nine per cent of all 'prime' deals now charging a percentage fee.

MoneyExpert.com, meanwhile, has said that there are now 506 mortgage deals on the market that come complete with uncapped application fees, compared with just 110 one year ago.

"Borrowers need to look carefully at mortgage deals and not just focus on the interest rate. What might look like a good deal will soon become a bad deal once fees are taken into account," said MoneyExpert.com chief executive Sean Gardner.

"Unfortunately too many borrowers still focus their initial attention on getting the best rate, without taking full consideration of the true cost of the deal. Providers to some degree exploit this by offering a wide range of low rate, high fee deals," added Moneyfacts.co.uk mortgage analyst David Knight.

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