In November 2005 the average flat arrangement fee was £441 but today it stands at a huge £827.
David Knight, mortgage analyst from eMoneyfacts.co.uk, said: "Thousands of borrowers coming off a two year fixed rate will be bracing themselves for higher interest charges, with the best deals over 1 per cent higher than in 2005. But they will also need to prepare themselves to pay much higher fees, with the average fee rising 100 per cent.
“The use of percentage fees has become more common with 9 per cent of all prime mortgage deals charging a percentage fee ranging between 0.2 per cent and 3.5 per cent.
This is bad news for borrowers as while a percentage fee might look relatively low, the highest fee - from Northern Rock at 3.5 per cent - would add a massive £4,550 to an average loan of £130,000.
“The increase in fees may not automatically mean that the cost of the deals has increased," added Knight. "What it does mean is the maze which borrowers need to navigate to get the best deal has become more complicated.
“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. Providers to some degree exploit this by offering a wide range of low rate, high fee deals.
“With around 24% of all mortgages not charging a fee, the market certainly offers choice, no matter what type of deal you are after.
“No fee, low fee, high fee and even percentage fees can offer a good deal for the right borrower. The trick is to successfully navigate the 6000 plus deals to find the best one for you. This maze of thousands of mortgages, with differing rate and fee combinations means it is more important than ever that prospective borrowers need to do their homework before committing to their new mortgage deal.”
