Whilst much of the news relating to mortgage and housing affordability in the UK has been bleak for quite some time, there has been a little good news for consumers recently.
It has been claimed that over the past year mortgage arrangement fees that are charged by banks and building societies have fallen by around 25 percent, enabling consumers to save some money in what is still a very difficult financial climate.
According to recent figures the average amount that lenders are charging by way of mortgage arrangement fees for a two year fixed rate mortgage has dropped £1243 a year ago to around £957.
For three year fixed rate mortgages the average arrangement fee has dropped by 26 percent to just over £800, and for tracker mortgages the average fee charges has dropped by around 24 percent to £1272. First Direct, the internet arm of HSBC, has recently announced that it is cutting the fees on its offset mortgages by around £300.
Many lenders are said to have increased the fees that they charges on mortgages following the onset of the credit crunch, as many had to look for different ways of increasing revenue to pay for their own higher borrowing costs.
However, officials have now said that the fact that many are now reducing these fees is yet another sign that the finance markets and the economy as a whole is showing some signs of improvement, which many have been speculation over in the past few years.
One mortgage industry official stated: “We have seen a significant drop in the average fees on mortgages over the last year but this has been driven by lenders not passing on the benefit of the significant drop in the cost of funds by charging higher interest rates. Borrowers, however, still need to be vigilant, as often the devil is in the detail – generally products with the lowest interest rates attract the highest fees.”