Mortgages - increasing in cost not quantity

David Black, Principal Consultant of Banking for Defaqto.com says: "The mortgage world is a completely different place from eighteen months ago as the wholesale funding model has largely dried up. We've seen low volumes of business accompanied by increases in rates and arrangement fees and a reduction in the amount that people can borrow. "

"It's astonishing to note that the average arrangement fee charged by 3 year base rate tracker mortgages has increased by 121%. In terms of rate increases the most significant increase has occurred in the two year fixed rate market were the average rate charged has increased from 5.42% eighteen months ago to 6.71% now."

"The worst hit part of the industry has been the sub prime sector but there's also been a lot of dissatisfaction amongst the mortgage broking community with provider distribution channel issues and dual pricing."

"Best buy mortgages often aren't staying on the shelf for very long and this means that speed really is of the essence if you see a mortgage deal that you want."