Julia Harris, mortgage analyst at Moneyfacts.co.uk, commented: “Whilst there is no doubt that fees have increased, particularly in the highly competitive two-year fixed rate market , it is highly unlikely that a borrower will sign up for a mortgage without being aware of the amount of the lending fee as this will be clear to see as part of the Key Facts Illustration (KFI) and be included in the mortgage offer.
“In cases where the impact of a low rate/high fee is questionable, Moneyfacts carries out internal true cost calculations to aid us in compiling our Best Buy tables. Furthermore, true cost calculations are currently used and illustrated in the Daily Mail money section each Wednesday and we will be rolling this out to other media partners in the next few months.
“Whilst the motion states that fees have been increasing, this is certainly nothing new. This practice has been increasing over the last eighteen months, but now that we have started to see more percentage and four-figure fees, it has obviously become more apparent to consumers and those outside the mortgage industry.
“It is also of slight concern that the MPs in question may not appreciate that a low rate with high fee scenario can be beneficial to consumers taking out larger mortgages. Specifically the Halifax 1.99% deal attracts a higher fee to offset the low rate. It is also a product with an extended tie in, offering 1.99% for the first 16 months followed by 6.49% for the rest of the 48 months in the tie in. Therefore, it can’t be compared on a like for like basis with standard fixed rate deals.”
