Mortgage market ‘less competitive’

The fallout from the credit crunch means it is now more important than ever to shop around to find the best mortgage deal, it has been suggested.

A fundamental change has taken place in the banking sector because of the problems lenders have experienced over the last two years.

Following a succession of takeovers and mergers, the mortgage market is now dominated by a handful of banking groups.

Ian Gordon, an analyst for Exane BNP Paribas, told the Daily Mail lenders had been able to increase their profit margins on mortgages in recent months because of a lack of competition in the market.

“Consumers are facing a permanent state of lower competition and higher prices,” Mr Gordon warned.

Borrowers are now likely to find that lenders are charging higher arrangement and exit fees.

These fees mean that people buying a home or trying to remortgage need to spend more time evaluating what represents the best deal for them, as the mortgage products with the lowest rates will not necessarily be the cheapest option overall.

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