mform.co.uk warned consumers that lenders’ non-refundable fees on certain products could vary from £65 to 0.5 per cent of the advance. It highlighted lenders, including Cheltenham & Gloucester, which has a non-refundable £99 fee, valid on further applications to it for 12 months, and Britannia’s non-refundable arrangement fee of £100.
Nottingham’s administration fee varied according to purchase price from £65 to £80, and Yorkshire’s 4.99 per cent fix had a fee of 0.5 per cent of the advance.
The costs were justified by lenders as covering processing costs and reserving products.
Eamonn Rice, chief executive of mform.co.uk, said: “Most borrowers will be unaware of whether fees are non-refundable and many will never be affected if their loan goes through. Lenders will argue that the non-refundable fee is justified and that it only applies in very limited circumstances.
“All of that is true, but none of it will be relevant or of any comfort to a borrower who has to pay a non-refundable fee for a mortgage they do not get.”
Stuart Cox, product manager at Purely Mortgages, said: “Fees like this will become more common as lenders look to tighten up their books and recoup costs. They are worse than exit fees because they are non-refundable even if the customer doesn’t get the mortgage. People don’t always pick up on them and brokers need to be aware of what fees are non-refundable.”
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