Moneysupermarket: Borrowers in arrears face 'unfair' charges

Date:Monday 13th October 2008

Lenders are increasing pressure on mortgage customers who are in arrears through extra charges, finance website has said.

The website said that charging a fee for debt counselling appears to be the "most unfair" of all charges facing people with repayment difficulties.

It called on providers to cut arrears fees, adding that borrowers in difficulty can face "some punitive and unjust charges".

Moneysupermarket added that the "biggest outrage" is charging for debt counselling when Citizens Advice provides it for free.

It provided a chart of various mortgage arrears fees, noting that GMAC and Halifax charge £100 for debt counselling.

Earlier this month, reported that the buy-to-let range of mortgage products had shrunk by 23 per cent in just one week.

Louise Cuming, head of mortgages, said that the number of such mortgages available had gone from 703 to 540 in seven days.

She warned that reduced competition could result in higher rates and even more difficulty finding a mortgage.