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Chancellor wants fair play on arrangement fees
26 June 2008 11:30
The chancellor has responded to substantial recent increases in arrangement fees by threatening action against mortgage lenders who set these charges far too high.
With arrangement fees having risen by two thirds in just 18 months, Alistair Darling has held talks with the Financial Services' Authority (FSA) and the Council of Mortgage Lenders (CML) over what constitutes a fair level for these charges to be set at.
He stated afterwards that while these costs obviously have to be met, it is important that borrowers coming off fixed-rates are treated fairly and warned that he would have the FSA investigate if he felt that this was not the case.
Yet the CML responded that there remains a wide range of mortgages available, some with high fees and low rates or vice versa, with the former option often popular among borrowers with large mortgages who want to keep their monthly repayments down.
It asserted that the most important thing is that borrowers know the overall cost of their mortgage, which is provided in the key facts document, while warning that cutting the range of fees that products can charge would detrimentally affect consumer choice.
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