You are here: Home - News -

MMR implementation could reverse rising mortgage fee trend

by:
  • 23/08/2013
  • 0
MMR implementation could reverse rising mortgage fee trend
Under the Mortgage Market Review, implemented from 26 April next year, lenders will have to highlight all mortgage fees and request explicit consent for them, which could reverse the spiraling fee trend, said a mutual lender.

The FCA has not been prescriptive about how lenders get consent, however, Paul Darwin head of intermediaries at Skipton Building Society said this extra consumer scrutiny on fees could see many refuse higher fee products and force lenders to stop rising fees year after year.

“What the MMR may do is discourage larger percentage fees of say 2.5% on mainstream mortgage products. If you take out a £100,000 loan alongside a £2,500 fee and this is flagged more clearly to consumers, this will lead to greater awareness,” said Darwin.

Fees have risen consistently to practically double over the last three years from a £879 average in August 2010 to £1,543 this month, said Moneyfacts.

Mortgage expert Rachel Springall said: “It’s the way the mortgage market has changed in that lenders are fighting it out on lower rates and maybe offering some free extras, but consistently charging higher fees.”

Mortgage consultatnt Frank Eve agrees lowering the headline rate but increasing the true cost to make the product more attractive has been the case for some time.

“Whether that’s a trend we’ll see continue, we shall see,” he added.

There are 0 Comment(s)

You may also be interested in