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Homebuyers urged to consider hidden mortgage fees

Date: Wed, 27 Apr 2005

Homebuyers are being urged to take into account hidden charges when applying for a new mortgage.

A study conducted by financial website moneyexpert.com shows that the cost of applying for a mortgage has substantially increased over the past 15 months, with a sharp rise in hidden charges. Average fees associated with discount rate mortgages now total £354 compared to £285 in January 2004, while for a fixed rate mortgage the cost is £402.

Although some loans may appear attractive because of low interest rates, once arrangement charges are added they can become less appealing. For instance, a Bank of Scotland fixed rate loan carries an application charge of £999.

Speaking to the Scotsman, Sean Gardner, of moneyexpert.com, said: "Homeowners have seen rises in mortgage rates over the past year and also have to pay increased rates when they want to change to a cheaper deal."

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