Research has revealed that providers charge 'arrangement fees' to more than half of all fixed-rate mortgage customers.

The financial website MoneyExpert.com says the number of mortgage providers making the charge, which is based on the amount of money borrowed, has risen by 14% to 49% over the last year.

There is no standard rate for the levy, with the amount varying from 0.5% of the mortgage size to 2.5%. The average fee lies around 0.89% - £1,335 on a £150,000 mortgage.

Costs for those with larger mortgages, however, can run into several thousands of pounds.

Only 4% of providers impose a cap on the amount of customers have to pay.

Among lenders who levy a fixed fee regardless of the amount being borrowed, the average amount charged has fallen during the past year, dropping from £860 to £790.

However, the reduction is largely due to lenders introducing low-fee or fee-free mortgage ranges, which offset the lack of an arrangement fee by charging higher interest rates.

Only one mortgage had a fee of between £100 and £200 12 months ago, but 49 different products now have a fee of this level.

But the highest fixed fee charged has soared by 25% during the past year, rising from £1,999 in September 2008 to £2,499 now.

Pierre Williams, head of research at MoneyExpert.com, said: "Borrowers looking for a mortgage focus on rate, but fee has to be a consideration particularly when these can run into thousands of pounds. All too often we forget about the fee by rolling it straight into the loan.

"Fees are often linked to loan to value ratios and anyone without a significant amount of equity in their house can expect to pay a hefty fee."

Meanwhile, research by financial information group Moneyfacts.co.uk found that the average cost of a two-year fixed rate mortgage has increased by 0.31% to 5.15% since March, when the Bank of England base rate was cut to a record low of 0.5%.

The rise comes despite swap rates, upon which the deals are based, falling during the same period.

But the average cost of a two-year tracker deal has reduced slightly during the same period, dropping by 0.14% to 3.72%.

There has also been an increase in the number of different mortgages available for people with smaller deposits, with the number of 90% loan to value loans rising by 17 to 106, while there are 80 more 75% LTV deals, giving a total of 509.

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