MORTGAGE EXIT FEES
Has your mortgage lender ripped you off?
Mortgage Exit Administration Fees (MEAFs) are the fees you paid to end your mortgage contract.
This may happen when you switch at the end of a fixed interest rate period or when the mortgage is paid off. These fees are supposed to deal with legitimate expenses your mortgage company incurred such as releasing deeds etc. However, it is unfortunately the case that these fees have become yet another money spinner for lenders at the consumers' expense.
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Mortgage exit fees from the major lenders (Source: www.moneyfacts.co.uk 1 March 2007).This is just an example but should be a helpful indicator.
| Mortgage exit fees from the major lenders | |||
|---|---|---|---|
| Provider | 2007 | Five years ago | Ten years ago |
| Abbey | £225 | £85 | £50 |
| Alliance & Leicester | £295 | £150 | £90 |
| Bank of Scotland | £245a | £150 | £50 |
| Bristol & West | £195 | £100 | £50 |
| Cheltenham & Gloucester/ Lloyds | £225 | £50 | £35 |
| Halifax | £225b | £125 | £55 |
| Nationwide | £90 | None | £67 |
| NatWest | £225 | £85 | £65 |
| Northern Rock | £250 | £150 | £75 |
| Royal Bank of Scotland | £225 | £75 | £80 |
| Woolwich/Barclays | £275 | £95 | £50 |
| Yorkshire Bank | £195 | None | None |
The charges are unfair
Some lenders have been increasing exit fees on existing mortgages. This means you may be charged more when you exit the mortgage than it showed in the contract at the time you signed it.
TheFinancial Services Authority (FSA) has ruled that some lenders might have increased their fees unjustifiably. Lenders should either charge no fee, or the original fee in the contract if that can be justified.Even agreed fees should only deal with actual expenses incurred such as deed release fees, land registry charges, staff processing costs and a reasonable proportion of general overheads.
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