I'm relatively new to the world of mortgages and not really had any debt before, but it seems to me that the world of mortgages is one that is unfair and rigged substantially in the favour of the financial institutions.
I understand that lending people money is risky (different risks for different people, amount lent, circumstances etc, etc) and so the borrower does have to pay a premium for that. This makes sense to me. Maybe I was naive, but when I was growing up I always thought that you get a mortgage for 20-25 years and yes you may have to pay a fee to get it initially (i.e. an admin type fee), but then you were "set".
If I look at HSBC (who I have a mortgage with), their SVR is totally ridiculous (4.19%) and therefore they basically force you to get some sort of deal. They then make sure there is one (so no choice...) which has no booking fee and the rest have a booking fee which feel extremely high (generally £1,000+) just for a 2 year period (yes, you can do 3, 5 and 10 too). I tried to calculate the different deals earlier and concluded that the one without the booking fee is about the same as the cheapest one with the booking fee, so some light at the end of the tunnel there.
I do feel like they are trying to trick you into paying massive fees each time and basically screw you out of every penny that they can. Plus they force you into these fixed deals (NB - even the tracker is only for 2 years and also has a massive fee) to stop you overpaying too much so they can guarantee to maximise their investment out of you for as long as physically possible.
Maybe I am just a very cynical person, but it does not seem like a fair system to me. Some time ago the government tried to make it easier to change current account and there was the whole discussion around unreasonable fees... why aren't they doing something for mortgages?
I understand that lending people money is risky (different risks for different people, amount lent, circumstances etc, etc) and so the borrower does have to pay a premium for that. This makes sense to me. Maybe I was naive, but when I was growing up I always thought that you get a mortgage for 20-25 years and yes you may have to pay a fee to get it initially (i.e. an admin type fee), but then you were "set".
If I look at HSBC (who I have a mortgage with), their SVR is totally ridiculous (4.19%) and therefore they basically force you to get some sort of deal. They then make sure there is one (so no choice...) which has no booking fee and the rest have a booking fee which feel extremely high (generally £1,000+) just for a 2 year period (yes, you can do 3, 5 and 10 too). I tried to calculate the different deals earlier and concluded that the one without the booking fee is about the same as the cheapest one with the booking fee, so some light at the end of the tunnel there.
I do feel like they are trying to trick you into paying massive fees each time and basically screw you out of every penny that they can. Plus they force you into these fixed deals (NB - even the tracker is only for 2 years and also has a massive fee) to stop you overpaying too much so they can guarantee to maximise their investment out of you for as long as physically possible.
Maybe I am just a very cynical person, but it does not seem like a fair system to me. Some time ago the government tried to make it easier to change current account and there was the whole discussion around unreasonable fees... why aren't they doing something for mortgages?