Homeowners warned on mortgage fees

31 October 2006
The fees tacked on to mortgages by lenders are pricey and vary by both mortgage size and the lender used, cautions MoneyExpert.com.

Valuation fees can traditionally start at £190 and rise as high as £565 but mortgage firms like ING Direct and Lloyd's TSB are breaking with this tradition by offering no-fee mortgages.

Free valuations are also found on some other mortgage products at a number of other lenders because of the increased competition for business.

However of the products that are still charged a valuation fee only 26 (of 134) will allow it to be added to the borrowing amount. Although this can be beneficial at times, an average £190 fee tacked on could add £400 of interest to a £100,000 mortgage over a 25-year repayment period.

MoneyExpert.com's chief executive Sean Gardner said the numbers are a warning to potential borrowers but high valuation fees do no necessarily signal a bad mortgage deal.

"Borrowers need to keep their eye on the ball when it comes to taking out a mortgage," he said.

"They need to think carefully about what will be the best value for them, not simply the lowest interest rate."

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