Mortgage costs up by third says analyst

Posted: 21 Nov 2006 10:33:27 GMT

Overall mortgage costs have increased by as much as a third in just three years, a study by mortgage research firm Mform has shown

Overall mortgage costs have increased by as much as a third in just three years, a study by mortgage research firm Mform has shown.

Average annual mortgage costs have shot up from £4,711 to £6,284, with 24 per cent of that cost increase coming in the last year alone.

Partially this has been due to interest rates rising to the highest level since 2001, with the average cost of mortgage borrowing now 5.41 per cent against 4.29 per cent in 2003.

This rise has been added-to with steeper application and exit fees however, with analysts suggesting that the rate of increases shows no sign of slowing.

"Compared to last year, house prices have increased by around 7.7 per cent and with the possibility of a further rise in the Bank of England base rate, the size and cost of a mortgage will continue to rise," said Eamonn Rice of Mform.

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