Non-refundable booking fees creeping into the market

"Another week, another kick in the teeth for mortgage borrowers, with news that Abbey has introduced a non-refundable booking fee of £150 on its mortgage range. Up until now, the only major player who had this was Lloyds TSB, with a £99 booking fee. This is just another step in the complete about turn in the mortgage market from just a year ago. Consumers have been king for many years now, with lenders fighting for their business, often at loss leading rates, but that has been consigned to history and these booking fees are another stark reminder of that. I would expect some other lenders to follow Abbey and start to make part of their arrangement fee compulsory," says Drew Wotherspoon of Charcol.co.uk.

"There are many things that can happen during a mortgage application that may result in a borrower being unable to complete, a great deal of which a lender can be accountable for. Traditionally, this has not cost borrowers anything other than wasted time and maybe some legal fees. However, should they not complete on a mortgage with an up front fee now, it will cost them actual cash. It's just another thing to think about in a market that is becoming increasingly challenging for all types of borrowers. The case for seeking advice, that seems to be gaining momentum, is only going to get to get more apparent with moves like this."

Fixed rate update

"It's not technically news, as we all knew it was coming, but lenders have begun the next round of re-pricing their fixed rates upwards. This week has so far seen Skipton withdrawing their rates, with news that their new ones will be priced higher, and Woolwich has moved all fixed rates up by at least 0.2%. Depressingly, for borrowers, it will not end here with others certain to follow, so the message for those who want a fixed rate is still the same - act now."

With inclement conditions, should you take the "all weather" mortgage?

"With conditions in the market currently blustery, to say the least, Cheltenham & Gloucester has released its "all weather" mortgage, which we know as a drop lock. This enables consumers to have a variable rate, but retain the ability to drop into a fixed rate at any time without penalty. For those with a deposit or equity of 25% or more, the rate is Bank Rate +1.39%, and the fee is £995, which makes it very good value in the market. However, as with all types of variable mortgages, and particularly in the current environment, borrowers should ensure they can meet payments should rates increase, or be prepared to drop into the fix, bearing in mind they are on the up."