According to a recent report, big-name mortgage lenders have been accused of employing underhand moves to boost their profit margins and raise their loan fees by as much as three times the level they were a year ago. The survey found that some banks had raised arrangement fees on some deals by as much as 183 per cent since the start of the credit crunch.

A recent report by credit agency Standard and Poors claims that two million households will enter negative equity by 2010 - 200,000 more than in the last slump.

With more than a third of homeowners estimated to be heading towards negative equity, the banks are seeking every means of reducing their risk – including raising ‘up front’ fees on mortgages.

So far, the 'collapse' in house prices has not been as big as many think - The Times ' Ten Worst Streets in Britain' for house price falls includes falls of well under 15 per cent.

What can you do?

If you know you are a really good credit risk and the loan you seek is one which is not a large percentage of the purchase price, then you should shop around for the best deal.

If you have a ‘flexible’ mortgage and have paid off a substantial amount of the capital, you may be able to trade all or part of your right to ‘roll up’ your borrowing to the initial sum borrowed for a better deal. Some roll-ups in effect give the borrower the right to roll-up their loans into negative equity. Capping the potential loan reduces the lenders risk.

If you are having difficulty with your loan repayments, take advice as soon as possible: a negotiated compromise with your lender is a much better solution than having your home repossessed.