Prospective mortgage borrowers are being urged to check the small print of the deals they are offered.
The advice comes from financial researchers Defaqto, which is warning consumers that application fees can “boost the true cost [of mortgages] quite considerably”.
Research from Find.co.uk has revealed that mortgage application fees have nearly doubled in the past three years, from an average of £334 to £611.
“Consumers need to not only take account of the headline mortgage rate, but also the application fee at the outset,” said David Black, head of banking at Defaqto.
And he also cautioned consumers to be aware that “lenders can manipulate their positions in best buy tables”.
“These tables are generally based on mortgage interest rates only,” he explains, which means that an increase in the application fee is not reflected in their position on the table.
In related news, figures released today by the British Bankers Association may suggest a slowdown in the mortgage lending market.
According to the BBA, the February rise in mortgage lending of £5.2 billion was the lowest in the past six months, and may indicate that demand for mortgages is “moderating”.
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