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Mortgage lenders sting borrowers for £3,500

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24/05/2007

Homebuyers could be out of pocket to the tune of £3,500 when taking out a mortgage, according to a study by website Yourmortgage.co.uk.

In total, a potential buyer wanting a cheap, two-year fixed rate mortgage could end up paying fees ranging from £664 (HSBC) to £4,285 (Northern Rock).

Paula John, editor of Yourmortgage.co.uk, said: “Our findings are proof that investing the time to research all the factors and costs involved with buying a home can really pay off.

“It is important not to be blinded by attractive headline interest rates but do your homework and see what associated fees are attached.”

She continued: “The differences in fees can be quite startling; for example, a valuation fee on a £100,000 property can vary from £135 with HSBC to £475 with Northern Rock.

“Exit fees follow a similar trend to the above, shifting from absolutely nothing with HSBC to £295 with Alliance & Leicester.

“When you add up the arrangement, valuation and exit fees, plus legal and possible early redemption costs, CHAPS, higher lending charge (if the deposit is less than 25%) and penalties for not taking out buildings insurance with a particular provider, the difference between lenders can be as much as £3,500.”

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