Homeowners deterred from remortgaging as arrangement fees rocket
Published: 10/09/2012
Homeowners could save thousands by remortgaging but are put off due to an increase in the cost of mortgage fees.
Mortgage fees, on average, have risen by 60 per cent over the past 18 months; in February 2011, homeowners would have had to pay out, on average, £920 on mortgage fees, today it will cost them £1472.
However this upfront charge could be a drop in the ocean when compared to how much they could save in the long term by remortgaging.
| Mortgage amount | Mortgage term | Monthly repayment at 3.49%^ | Monthly repayment at 4.74%^^ | Total amount repaid at 3.49%^ |
Total amount repaid at 4.74%^^ |
| £150,000 | 25 years | £757.60 | £863.94 | £227,280 | £259,180 |
^Based on Barclays recent cut to its Great Escape two-year fixed rate remortgage product for up to 70 per cent loan-to-value properties. ^^Based on Santander’s standard variable rate increase, from October
Not only would a homeowner save £106.34 a month (£1276.08 a year) in this example, they would save a whopping £31,900 over their full mortgage term.
While mortgage fees are rising, Goldsmith Williams legal fees for remortgages remain at a low £299 including VAT and standard disbursements.
Content correct at time of publication