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High arrangement fees are hardly fair treatment for clients

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.



Home ownership has a better feel to it than renting

With regards to the negative comments on Mortgage Strategy Online last week about the remarks made by AMI’s chairman John Gummer, frankly I can see what he means. Home ownership does have a better feel to it than renting. Believe it or not, there are many people making inroads into their mortgage, which is definitely […]

ING Direct will revamp system to suit brokers

ING Direct is to make its mortgage application system broker-friendly as part of its transition to a lender that uses intermediaries. The firm is looking to change its system so that it can differentiate between direct and intermediary applications. Currently, brokers can submit applications online but use the same platform as direct customers. Under the […]


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