Lenders cash in on home buyers

There was a time when building societies were mutual organisations, dedicated to helping people become home owners at the lowest possible price.

When mortgages were in short supply, your loyalty as a saver would be rewarded with a loan. Charges would be so small they were hardly noticed.

How times change. Today, most building societies are banks, part of vast multi-national organisations whose only motivation is the bottom line.

Lenders fall over themselves to pose as friendly, helpful, low-cost organisations. The truth is very different.

Some of these banks have cheerfully closed dozens of branches and transferred call centres to India. If they treat their own employees so ruthlessly, why should they treat their customers any better?

Sure enough, a report today reveals an outrageous rise in so-called "arrangement fees" which have soared over the past couple of years by between 99 per cent and 678 per cent.

While customers naturally look at the interest rates when comparing mortgage deals, how many bother to look at the small print?

In some cases, it would be cheaper to opt for a higher interest rate than take on an arrangement fee of up to £3,000.

There was a time when people aspiring to own their own homes were encouraged by building societies and governments alike.

Today, they are hammered with arrangement fees and hammered again by a Government which demands vast amounts of stamp duty on even modest homes.

No wonder we are becoming such a cynical nation. If home ownership is such a good thing, why are home owners ripped off so ruthlessly?