April 21 2014 Latest news:

Mortgage fees have long blighted the ability of consumers to make fair comparisons when they look for the best deals.

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Legal fees, arrangement fees and valuation fees are perhaps the most common fees attached to mortgages, but a new study has found there are no fewer than 39 different types of fee that can be applied to home loans by lenders.

The study by consumer champions Which? discovered that both the number and the level of fees had gone up since the onset of the financial crisis, with lenders looking for new ways to strengthen their balance sheets by forcing consumers to cough up more for the privilege of being allowed to take out mortgages.

Four in every five two-year tracker mortgage deals charged more than £990 in set-up fees last year for loans of up to 90pc of a property’s value. Only one in five deals did so in 2007.

The vast range of fees can be applied for things such as booking, administration, arrangement and valuation, while there are charges for falling into arrears, changing from interest-only terms to a repayment basis – and even for the cardinal sin of choosing to take out your buildings insurance with someone other than your mortgage provider.

Which? found that most lenders now levy more than 20 types of additional fee, with Newcastle Building Society leading the way on 29, closely followed by Ipswich Building Society. In fact building societies, which often claim to give the fairest deals to customers, took the bottom five places in the Which? league table, although Stafford Railway Building Society came out on top with just three.

The overall result is another example of rip-off Britain. As with things such as mobile phones, it can be nearly impossible to compare deals on a like-for-like basis, thanks to the distortions created by the dozens of possible fees.

“Finding the right mortgage used to be as simple as looking for the best rate but the array of fees nowadays has made it a much harder task – it’s never been more difficult to understand how much your mortgage is going to cost you,” said James Daley, of Which?

“Lenders should make it clear what the total cost of a deal is so borrowers can make easy comparisons.”

For example, Cheltenham and Gloucester’s two-year tracker mortgage at 1.99pc for 50pc loan-to-value looks like a good deal. But once you add the £2,949 in set-up fees, it costs £2,435 more over two years than the equivalent First Direct product, which is advertised at 2.19pc.

There are signs, however, that those providers who impose the fewest fees see it as being a selling point and are beginning to shout about it.

HSBC and sister brand First Direct took second and third place in the table, with four and five different fees respectively.

Stuart Beattie, head of mortgages at HSBC, said: “Once a customer completes a mortgage with HSBC there are no further fees during the life of the loan.

“Our transparent fees approach provides homeowners with an assurance that if the fee isn’t mentioned in the sale documents then they won’t have to pay it.”

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