How does the current state of market affect my choice of mortgage?

The dispute over bank charges has been long and at times bitter. Ever since financial advice websites like Money Saving Expert began to highlight the questionable legality of banks and building societies penalising customers for unauthorised borrowing, suggesting that that readers are within their rights to claim back penalty charges, the issue has become something of a hot topic. With the aid of template letters downloaded from such sites consumers have now reclaimed £19 million in fees from their banks.

With a High Court case in which the Office of Fair Trading (OFT) and seven banks will contest the legality of these fees swinging into action it seems that we've reached a decisive moment in the dispute, but what are the ramifications likely to be if the banks are forced to cap their fees?

As much as a defeat for the banks might seem like a victory for the consumer consider the bigger picture and it's quite possible that bank customers would face increased costs in other areas. So, whilst a minority of account holders are being stung by dubious, possibly unreasonable, charges it should be remembered that it is thanks to the extra revenue generated by these fees that British banks are able to offer what they would claim amounts to free banking.

Indeed, it has been suggested that without the extra funding Banks would no longer be able to offer for free the numerous unprofitable services that British consumers currently take for granted - free cash withdrawals and cheques for instance. A decision in favour of the OFT could lead to bank account holders facing a barrage of new costs.

Some banks have already anticipated this change by charging a monthly fee to less profitable account holders and there is a fear that we could end up heading towards a fee-per-transaction system; a development that many commentators claim would not be readily embraced by British consumers.

Certainly banks would be forced to reassess the way they charge customers.

Do you know how much your bank is charging for an unauthorised overdraft? Here's a summary of some of the most popular current accounts:

Natwest Current Accounts: Unauthorised Overdraft rate: 29.69% EAR, Penalty fee: Nil, Paid referral fee: £30 per item.

Barclays Current Account: Unauthorised Overdraft rate: 27.5% EAR, Penalty fee: Nil, Paid referral fee: £30 per item, max 1 per day, max 3 per monthly charging period. Refunded if first fee charged in a 12 month period.

RBS Royalties Current Accounts: Unauthorised Overdraft rate: 29.84% EAR, Penalty fee: Nil, Paid referral fee: £30 for any day on which a paid referral occurs.

Alliance and Leicester Premier Current Accounts: Unauthorised Overdraft rate: 0% EAR, Penalty fee: Nil, Paid referral fee: £0 to £9.99 - Free, £10 + - £25 per item.