Mortgages -
Mortgage fees 'on the up as rates go down' - 08/02/2008
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Headline cuts in variable rates made by UK mortgage lenders cover up excessive increases in fees, it was claimed today.
The Bank of England announced yesterday that it would reduce the base rate by 0.25 per cent down to 5.25 per cent - a change which is to be passed on in full to customers of many lenders.
However, research from financial website Moneyfacts shows that the inflated fees these firms charge will cancel out the variable rate reductions, the Daily Mirror reports.
The study showed that mortgage borrowers on a two-year fixed rate are paying £1,500 more than when base rates were last at 5.25 per cent.
Stephen Horrocks at Moneyfacts commented: "The lenders have got the cream and they're desperate to keep it - there is no way they can justify some of the fees they're charging."
Scepticism regarding the latest round of rate cuts was also expressed by a finance expert.
Speaking to the newspaper, chairman of the Independent Banking Advisory Service Eddie Weatherill commented: "When the official rate goes up [lenders] are quick to pass on the higher cost of borrowing.
"But when it goes down they are suddenly not quite so quick on the draw. It is pure greed."
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