Mortgage Market Review and mortgage product fees

mortgage market review

Mortgage products fees under MMR

We are all familiar with lenders charging an application or product fee on a mortgage.

Typical fees are £999, but can often be £1499, or £1999 for larger cases. Most lenders will allow the client to add the fee to the loan rather than find it cash.

In fact, currently some lenders insist that the fee is added to the loan.

From 26 April 2014 the Mortgage Market Review rules stipulate that fees may not be automatically added to the sums advanced. Further, the regulations require that the mortgage adviser makes the effect of adding the fees clear to the borrower so that they can make an informed choice as to whether to add them to the loan.

We expect that as a result of this a greater spotlight will be on the fees charged by lenders. We may see a little more competition to reduce lenders fees, perhaps at the expense of rate.

coming tomorrow…Mortgage Market Review and direct mortgage deals

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