Headline mortgage rates have hit an all-time low but rising arrangement fees mean that deals aren't always as cheap as they seem.
Some lenders are now charging fees of as much as £7,500 for high-value loans.
The average mortgage arrangement fee is now £956, up from £924 one year ago, according to new research from Moneyfacts.co.uk.
The average fee has hit a 21-month high and is now £68 higher than in June 2014.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said that with more than 4,000 mortgages to choose from, finding the most cost-effective deal without advice is more confusing than ever.
“The current mortgage market boasts some of the lowest rates on record, which is great news for borrowers, but the increase in the average mortgage fee clearly shows that some of these headline-grabbing rates are being compensated for elsewhere.
“Some of the fees borrowers are being asked to pay are nothing short of shocking, with up to £7,499 being charged for some high value loans."
Nelson said the cost of administering a mortgage varies little from one case to the next.
“This could lead many to wonder why there is such a big difference between the fees charged and why they are even charged in the first place.
“It’s great news that the Council of Mortgage Lenders is involved in looking at the consistency in the market to help borrowers when they compare fees, but this will have no impact on the amount charged."
Nelson said that with providers and borrowers focusing on the interest rate, the impact of a large fee may not always be factored in.
“But high fees can have a big impact on the cost-effectiveness of a deal, particularly when they are added to the mortgage advance, which increases the amount borrowed and pushes up the size of the monthly repayments."
Large fees also make remortgaging to a new deal a costly affair and may deter many, she warned.