Mortgage exit fees

Some lenders have a change of heart!

Lenders have been reducing or even scrapping their mortgage exit fees prior to a deadline when they would have had to make their position clear on these controversial charges.

Exit fees, charged as an administration fee when borrowers pay off their loans, have been rising steadily in recent years, with lenders often charging more than the original mortgage contract specified. Many borrowers have successfully claimed refunds for excessive charges.

The Financial Services Authority announced a clampdown in January, demanding lenders to clarify their terms and conditions for the fees by 31 July. The fees also had to be realistically related to the cost to the lender. However, some mortgage providers are taking a different tack by changing the name of the fee and the way it is charged.

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Article date: 08.07