Mortgages: Needlessly confusing and costing you too much
Sometimes, it is almost exactly like mortgage lenders are making everything so needlessly confusing that it puts consumers off from being able to work out what works best for them. Almost exactly like that.
Well, research has shown that homeowners are likely to be paying more than they need to because it is too difficult to compare mortgages.
The folks at Which!!! did a survey and they found that a paltry 3% of people were able to rank five two-year fixed mortgage deals in price order.
It looks like borrowers aren't being given clear information about mortgages and that lenders are charging a huge array of fees which are baffling everyone. These sneaky fees are one of the biggest problems in getting a mortgage that works for you.
Borrowers are faced with over 40 different fees and charges from lenders, from arrears fees to set-up costs, right through to final repayment charges and more. Administration costs will hit a borrowers account multiple times and arrangement fees are getting increasingly more expensive, doubling in the past five years, now averaging at £1,588.
Of course, lenders aren't helping as they're using different terminology and names for all these fees, which adds to the confusion for those trying to get a mortgage.
So while you're looking at one lenders' APR, it might appear cheaper but all the hidden costs actually make it far more expensive than another.
George Osborne clearly needs to utilise the Autumn Statement to make mortgage price comparison easier for customers and enforce rules which make the full cost of mortgages much, much clearer.