Mortgage fees soar amid record low rate environment

The average fee has climbed 17% from £879 this time last year to £1,030 now, figures show.

Typical mortgage rates are at a record low, and while this undoubtedly means reduced costs for consumers, lenders are partly offsetting that fall with a rise in costs to secure that deal.

The highest fee on the market is £3,800, charged by Accord Mortgages. Precise Mortgages charges the highest percentage arrangement fee at 2% of the loan, which could run into thousands of pounds.

Only 357 (12%) of mortgages charge no arrangement fee, the findings from data provider Moneyfacts show.

Michelle Slade, from Moneyfacts, says: "Unfortunately, too many borrowers still focus their initial attention on getting the best rate, without taking full consideration of the true cost of the deal.

"In many cases a low rate with a high fee can work out more expensive than opting for a slightly higher rate, but with a lower fee."