£225 to move my Mortgage??

Poppy9 · 21 November 2005 at 10:18PM

My mortgage deal is up soon with Abbey Nat. They say I have to pay them £225 to leave them even though I will be out of any penalty period. Is this correct. I've read through the Mortgage offer and T&C and can find no mention of this. Chap told me it's for release of deeds and it is standard across all BS. I however move my mortgage every 2 years and have never paid this sort of money and my settement statement from Halifax 2 years ago (via solicitor handling remortgage) only show £25 under other charges.

Is he spining me a line? He is based in their redemptions dept. and I rang to ask them for details of a new deal. He was slow and best he offered was 5.3% with a £395 fee. I told him at the outset the best I had found from another BS was 4.99% with no fee but he was so dopey he didn't seem to care so long as he told me they got their £225. He also mentioned that mortgages were now regulated by FSA which they weren't when I remortgaged 2 years ago with them. I asked him what this meant and he said he didn't know but he had to tell all callers. What does it mean for me the borrower?

herbiesjp · 21 November 2005 at 10:40PM

Mortgage regulation came into force as of October last year - so the FSA now regulates all residential mortgages - it simply means as a consumer you now have a regulator to go to.

As far as teh £225 is concerned, that is indeed a fee to move away from Abbey, however there have ben many posts previously explaining ways of appealing these fees if they have increased disproportionately over the last couple of years.

You may well find a better deal away from Abbey - depending on your circumstances

Poppy9 · 21 November 2005 at 10:47PM

Thanks for the info. I'll do a search on the fees bit. I don't see they can impose something that wasn't in their mortgage offer or T&C.

I didn't really have any intention of staying with Abbey but my FA said I should give them a ring to see if they made me a decent offer so save me the hassle of moving.

My mortgage ends in 5 years so I'm on the home straight now.:)

Ian_W · 21 November 2005 at 11:20PM

Hi Poppy,
Abbey have always had a deeds release fee it's whether it's been unreasonably increased during the lifetime of your mortgage that's the issue [a lot have increased them from £100ish to £2-300. There's a specimen letter from lisyloo and some other comments on this thread:
http://forums.moneysavingexpert.com/showthread.html?t=100358&page=3

Abbey is one of the lenders whose policy is to only offer the best rates to new customers only, so not surprising you can find better elsewhere.
BoL.

canny_yorkshireman_2 · 21 November 2005 at 11:44PM

It must really pee you off when a:your current lender cannot compete with the market and b:then sting you for a deeds release fee which used to be a very small charge but now it seems that the institutions can ramp this up by way of compensation of loosing the business.I would complain in letter and ask them why they do not match other lenders and give you a breakdown of the costs involved which you will be forwarding to the appropriate regulatory body.good luck

greenwich · 22 November 2005 at 12:57PM

I complained about this to Abbey a few months ago. My initial letter of complaint just got a standard reply with lots of unconvincing arguuments, some of them repeated. I wrote back rebutting their arguments and got another standard letter, which said it was their final letter. Obviously they get enough complains about this to have standard letters ready which they appear to send out without reading the customers' letters. I regret now not asking them for a breakdown of their costs though I suspect I would still have got the standard letters.

The complaint is now with the Ombudsman. The grounds of complaint are that the T&Cs only allow Abbey to recover their costs provided they are reasonably incurred and are reasonable in amount. I don't think £225 is reasonable for the work involved but I am not sure the Ombudsman is ready to go as far as the OFT (or was it the FSA?) was prepared to go with bank charges recently. So I expect the complaint to get turned down. At that stage I will see if I feel like suing Abbey.

Robert_Sterling_3 · 22 November 2005 at 2:44PM

When you give a lender a mortgage on your property you usually sign a contract to say that you will pay back the money in monthly installments for 25 years.
You may however choose a dicounted rate, or a fixed rate for an initial period of 2,3 or 5 years.
Nevertheless the contract is for 25 years.
There are a number of costs involved in obtaining the mortgages.
One is the final discharge fee ( which may have a different name).
It may be an administration fee, a deeds release fee etc.
The amount of this fee may be known on day one and it is amortised over the 25 year period so that it does not impact the APR calculation too much.
Like the Standard Variable Interest rate on a typical loan it is variable and it increases from time to time. Unlike the interest rate it monotonically increases and does not as far as I know ever decrease.
The lenders need to make some profit.
They also need to at least appear to be competitive.
To this end they offer attractive terms to First Time Buyers and often to New Customers Only.
To make some profit from astute borrowers they need to charge arrangement fees to make up for the low introductory interest rates and termination fees for those who hop from one lender to another.
It all reminds me of the govenment approach to Tax.
They assert that income tax rates will not be increased.
But the amount of money spent does increase.
So other taxes are increased.
E.G. Council Tax. Stamp Duty. National Insurance. TV Licence.
With lenders the interest rate may go down but the charges go up.

Poppy9 · 22 November 2005 at 4:02PM

Thank you all for your replies. I'm not objecting to them making a charge, but it should have been set out in the mortgage offer and subsequent T&C if the charge was significant - which I think £225 is.

I'm going to crib some of Loopy's letter and embellish it a bit. I will also enclose a copy of their offer & T&C and ask them to return them to me with the relevant charge highlighted. I will also ask them for a full breakdown in arriving at their charges.

Thanks again for all your helpful advice.

catherineblack · 22 November 2005 at 4:17PM

Hi
I'm glad you posted this question - I'm in the same situation. (and my mum asked me to post about this so you've saved me the trouble!) Abbey are going to charge me £225 to move mortgage providers - even though the 'deal' I had ended a year ago. I find it very unfair as changing mortgage provider will save me around £200 per year - so there is no point in me moving. I'm so annoyed. I have decided to get a deal with Abbey because I have no other choice. For people on a low income this is very depressing.

HGLTsuperstar · 22 November 2005 at 5:57PM

catherineblack wrote:

!) Abbey are going to charge me £225 to move mortgage providers - even though the 'deal' I had ended a year ago. I find it very unfair as changing mortgage provider will save me around £200 per year - so there is no point in me moving.

but the £225 is a one-off fee so assuming you have more than 1 year left on your mortgage, you will save overall

YorkshireBoy · 22 November 2005 at 6:02PM

catherineblack wrote:

...even though the 'deal' I had ended a year ago.

You've been on SVR for a year! :eek:

catherineblack wrote:

I find it very unfair as changing mortgage provider will save me around £200 per year - so there is no point in me moving.

A 2 year deal will save you £400, and a 3 year deal saves £600 - surely?

catherineblack wrote:

I have decided to get a deal with Abbey because I have no other choice.

In my experience, as long as you don't have a very small mortgage, there is usually a better deal to be had elsewhere.

£225 to move my Mortgage??

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