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Most mortgage lenders back down on exit fees

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01/03/2007

Most mortgage lenders have backed down on charging high exit fees to borrowers closing their homeloans once their saving and investment in the property market has been paid for.

Watchdog the Financial Services Authority (FSA) warned the lenders that they had until 28th February to “justify” raising their exit fee, or to agree to charge no fee at all or stick to the original amount.

An FSA spokesperson said that to date not one lender had chosen to retain the higher fee and borrowers coming to the end of paying for their UK investment in property were being charged the old lower exit fees.

“Certainly the impression we are getting as we go through the responses is that most lenders have gone for original mortgage exit administration fee option,” commented Robin Gordon-Walker of the FSA.

Chris Paterson, a 53-year-old Chelmsford homeowner, who has just finished a 25-year repayment mortgage, said: “My lender sent me a letter saying it wanted £300 to ‘administer’ the final stages of my loan.

“I wrote back immediately saying that I had no intention of paying that sort of amount as it could go to my saving and investment pot.

“I contacted the FSA myself. The cheek of it is beyond belief – like asking spectators to pay to leave the ground after a football match has ended.”

He added: “It’s one-nil to the FSA in my opinion and good luck to them.”

 

 

 

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