Cost of moving home triples
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| (C) Rex Pictures |
The costs of moving don’t stop at the lawyers and estate agency fees. Your mortgage can be a minefield of hidden charges – many of which are rising steeply.
Research from financial analysts Moneyfacts shows that mortgage fees have also trebled over the past decade to reach an average cost of more than £900. There has been such consumer concern that the Office of Fair Trading is investigating the legality of exit fees – and many consumers have successfully won rebates. These are the charges to watch out for:
Early repayment charges
Most mortgages include early repayment charges, which are levied on you if you quit your current mortgage before a specified date. While with some mortgages these charges only apply while you’re in your special offer period, for others they can last longer.
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So check this out with your mortgage lender early on and also keep it in mind when you decide on your next mortgage deal – otherwise you could shell out up to 6% of your mortgage. There are some deals around with no early repayment charge, but higher overall rates of interest.
Exit fees
Just as you pay to set up a mortgage, you may have to pay to leave it as well. Exit fees - also called administration charges, sealing fees or deeds-release fees – have skyrocketed in recent years. In 1996, the highest exit fee on the market was just £80 – today it’s a whopping £295.
Higher lending charges
If you’re moving up the property ladder and can’t quite afford to pay a good-sized deposit on your new place, you could get hit by a higher lending charge. This generally kicks in on loans that are for more than 90% of the value of the house – and can set you back over £1500 on average, according to Nationwide. So try to avoid this by saving up as hearty a deposit as possible.
