I’m interested in the continued talk about treating customers fairly, especially in relation to rates. Despite the Bank of England base rate being 0.5%, to secure an advantageous interest rate on a buy-to-let mortgage of 3.99% – which is hardly giving it away – our clients have to pay an arrangement fee of 3%.
So, my prudent client who is buying a five-bedroom property in north London with a £577,000 mortgage has to stump up more than £17,000. Even on a more probable £150,000 advance, £4,500 or £5,200 is added on.
Huge arrangement fees seem to be prevalent among residential mortgage lenders – all this nonsense so the lender can reduce the initial pay-rate.
While I realise the banks are not borrowing at 0.5%, a 3% or so margin and a one-off 3% or more fee on top is questionable.
HAMMOND MORTGAGE SERVICES