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Smaller mortgage holders penalised, says report

09 September 2005
Smaller mortgage holders are getting a raw deal when it comes to remortaging, according to research by My Mortgage Direct.

The mortgage broker says that those with small mortgages are likely to be most affected by escalating arrangement fees.

Managing director of My Mortgage Direct, Paul Hearnden said: "Arrangement fees have climbed steeply in the past 12 months and look set to remain high.

"Now we have reached the point where borrowers are barely saving anything on their monthly payments - many now feel it's not worth the bother."

Arrangement fees, which were initially introduced to cover the paperwork involved in moving a mortgage to a new mortgage provider and charged at £100 or so just a few years ago, have increased astronomically, with some mortgage brokers charging up to £500.

According to My Mortgage Direct, arrangement fees look set to remain high and lenders seem to be favouring borrowers with larger mortgage requirements, meaning that people who do not need large loans are often disregarded.

To read more about remortgaging, click here.

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