Summary

Lenders publish their APRs so we can make an informed decision on which mortgage to choose. But there are more charges being added on behind the scenes, and they're rising ( life insurance quotes ) at an exponential rate, as this article finds.

Mortgages. Rising add-on charges beat inflation

Author: Anna Richardson

Everyone's doing it - remortgaging rather than sticking with the

Mortgages. The pitfall of Interest Only mortgages.
Interest Only mortgages have become increasingly popular. Why, and what are the concerns?
Foreign Currency Mortgages. What are they and what are the risks?
Foreign currency mortgages could save you a lot of money but the risks are high. This article explains.
Getting the Best Mortgage Loan With a Bad Credit Rating
Sorting a mortgage out can be stressful, especially if you have a poor credit history. This article provides some useful advice
Mortgages and Loans. Islamic finance avoids interest.
Muslims are forbidden by the teachings of the Koran to pay interest. This means that conventional mortgages and loans cannot be used. This article explains the alternatives available for Muslims and defines some of the words used in Islamic finance.
Mortgaging for funds
A new study has found that pensioners are concerned that they will have to sell their homes or take in lodgers to make ends meet.
Buy to let – a change for the better
Do you own a buy-to-let property? There are some proposed new rules regarding tenancy agreements. Find out more. Buy to let – a change for the better
same old mortgage provider that just isn't competitive compared to all the new deals. Well okay, not everyone, but enough for the lenders to sit up, take notice, and start introducing some additional charges to make sure that they don't end up out of pocket.

There are a lot of good deals out there, you may see an opportunity ( cheap mortgages ) to remortgage for 4.4% on a two year fixed interest contract. But there will be other charges for you to pay, and the small print will no doubt reveal that you will also be penalised if you decide to remortgage again when the two years is up. It's essential that you find out what these costs are before taking the plunge, as it may not be worth it.

Click to get a mortgage quote

The lenders have upped some of their charges as a reaction to the trend towards remortgaging, the people they call 'rate tarts'. The aim is to charge people for leaving their ( best mortgages ) mortgage, although the new customers they receive will not be penalised, until they leave that is. However, with the remortgaging business as big as it is, with 1.1 mortgage holders switching lenders in 2005, it's no surprise that the lenders want to cash in. In total, £117 billion worth of money moved from one lender to another in 2005, so there's a lot of money to cash in on.

We think that some companies are going way too far though - we found one mortgage whose additional charges added up to £1,000, and that was only to move to ( personal loans ) another mortgage within the same company.

The lenders are adding on charges wherever they can. Here are some examples:

  • administration charges - charging customers a set rate for a letter or phone call. With one lender, it would cost you £35 to receive a ( life insurance advisers ) photocopy.
  • increased valuation fees,
  • increased penalties for paying off early (known as early redemption penalties,
  • an admin charge for leaving the mortgage - called an exit fee.

 

Click here for page 2

Statutory Wealth Warning:
Your home may be repossessed if you do not keep up your repayments on a mortgage or any debt secured on it.