moneysupermarket.com comments

on Abbey's announcement that the total booking fee can no longer be capitalised on the up to 95 per cent range

Commenting on Abbey's announcement that the total booking fee can no longer be capitalised on the up to 95 per cent range, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "I suspect the Abbey announcement that it will no longer allow borrowers to add fees onto a 95 per cent LTV product has been driven by decreasing house values.

"Adding fees onto a 95 per cent mortgage effectively means the lender is exceeding 95 per cent LTV from the outset, something Abbey are clearly nervous about doing in the current climate.

I fear this will be a growing trend leaving applicants for 95 per cent LTV products not only needing a five per cent deposit, but savings to cover fees, stamp duty and sols costs as well.

Financially, borrowers will be better off in the long run if they do not capitalise fees, however, for cash strapped first time buyers having to find this amount 'up front' is yet another hurdle on the way to home ownership.".

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