Mortgage Arrangement Fees

EDM number 915 in 2006-07, proposed by Steve Webb on 20/02/2007.

That this House notes with concern the trend of increasing levels of arrangement fees associated with new mortgage products; further notes that high arrangement fees are being used to subsidise low headline interest rates so as to ensure that mortgage products appear in best buy tables, even where such mortgages are not the best buy once account is taken of the fees charged; further notes that in press advertisements the low headline interest rate is given considerable prominence whilst the high arrangement fee is given less prominence; further notes that these questionable promotional practices occur at a time of growing mortgage arrears, repossessions and repossession orders; is concerned that poorly advised homebuyers may be attracted by such low headline rates which may not be good value for money; is particularly concerned by the recent product advertised by the Halifax Bank which had an arrangement fee of £1,999; and calls on the financial services industry to ensure that all of the key elements of a mortgage deal are given equal prominence and to take other steps to ensure that homebuyers are not sold inappropriate mortgage products.

This motion has been signed by a total of 54 MPs.