As a result of being subjected to poorly presented fees & charges characterised by a lack of clarity, homeowners are prone to being ripped off by lenders when it comes to their mortgage outlay, according to a consumer group
Which? has found that confused customers are struggling to attain the value they are due to the overload of stealth fees flooding the market. Their research showed that lenders are tendering over 40 separate fees and charges, with only 3% of people able to determine the cheapest mortgage deal on offer.
Consumers are being charged numerous fees to account for the administration of their mortgage, and the value of these fees have increased considerably over the years, highlighted by arrangement fees practically doubling from £878 in 2009 to £1588 in 2014.
As part of its ëstop sneaky fees and chargesí campaign, Which? has piled pressure on the Chancellor to address the lack of clarity within the mortgage comparison sector in his Autumn Statement. Through cracking down on the number of different fees ñ which include booking fees, administration fees and application fees ñ borrowers would be able to compare deals more efficiently to their financial benefit.
Which? has called for government to group all obligatory fees attached to a mortgage offering under one banner of ëtotal feesí due. Consumers struggle to work out which fees are and arenít obligatory and clearer information needs to be provided in order for borrowers to know what they are buying into.
Richard Lloyd, executive director of Which?, said: “Homeowners could be paying over the odds for their mortgage because of the complex range of fees and charges that prevent them from finding the best deal.
“The Chancellor must act now to stop sneaky fees and charges and end mortgage confusion for consumers.
“The Government and the regulator should also explore better ways of presenting the total cost of mortgages.”
“The government is committed to increasing competition in the mortgage market and making it simpler for customers so they can choose the mortgage that’s right for them,” said a Treasury spokesperson.
If this message of assurance is to be taken seriously, then government ought to actively address Which?ís concerns, for this is the only way borrowers can be confident they are being provided with a flexible, consumer-orientated service.
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