Poor credit rating borrowers paying more

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Poor credit rating borrowers paying more

Tue 30th Jan 2007

Borrowers who find themselves with a poor credit rating have seen interest rates rise over the last six months, price comparison website MoneyExpert has said.

Although these borrowers have been found to be paying an additional 0.24 per cent over the past six months, it is so-called sub prime mortgage holders that are feeling the pinch.

Sub prime mortgages have seen the average fee on the product increase by 13.5 per cent, which equates to an average fee of £923, up from the previous amount of £813.

Sean Gardner, chief executive of MoneyExpert, said: "Many people rely on sub prime mortgages, from the self-employed to people who have very poor credit ratings.

"Although it's good news that many lenders haven't passed on the base rate rises on sub prime mortgages, customers have to be wary on fees."

It appears that people with poor credit are finding it hard to obtain a fee-free mortgage at present with only 13 products offering this service compared with 71 six months ago.

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