Are they going up again?
You bet. Average fees have climbed above £1,500 for the first time ever.
Are the fees justified?
Not at all. Sure, banks and building societies have to do some administrative work when arranging mortgages but they get well paid for that through the money they make in interest payments.
So why do they have such high fees?
That's simple. It allows them to advertise what seem like great deals. The Chelsea, for instance, offers a two-year fixed rate at just 1.97 per cent. But to get it you'll have to pay £1,545.
The fees can't make that much difference?
They do. If you bear in mind that the £1,500 is only for a two-year deal, it can add an awful lot to the cost of a home loan.
So why not scrap the fees?
It's all about competition. No lender will only offer rates that reflect their profits as they will look uncompetitive. As long as you're aware that low rates hide fat fees, and that you need to add total charges when comparing deals, then you should be alright. In fact a higher fee and lower rate could still be cheaper, but the opposite may be true too. It may be wise to get expert help in sorting out the best deal.