The Motley Fool points out 3 mortgage rip-offs that lenders use to recover the cost of offering low interest rates.
In summary they are:
- Arrangement fees – consider how much the arrangement fee adds to the interest rate to see if it is really such a good deal.
- Exit fees – apparently these have almost doubled in the last year. Check the small print.
- Insurance premiums – don’t fall into the trap of buying your home insurance from your lender – shop around for cheap premiums! They may also sneakily add the insurance premium onto your balance so that you incur interest on that too – very cheeky!