what is mortgage account fee for?

katiecoodle

Hello - I've just remortgaged & have been sent a letter to say its all up and running. The new lender is the halifax & they've confirmed to me that the arrangement fee of £999 has been added to the loan, and then they've also put that the £245 mortgage account fee has been added to the loan too. This is the first I've heard about this fee (I can't remember anything about it in previous correspondence) but noticed that the letter said even if I choose to pay it upfront I will still be entitled to the benefits of the product. Anyone out there got any ideas what the benefits of this product could be???:o

JayZed

It's basically an administration fee:

http://www.thriftyscot.co.uk/072008/mortgage-account-fee-launched-by-halifax.html

http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=443882&in_page_id=58

koexelek

Basically, the lender got a bit of a B#llocking from the FSA a while back for charging extortionate deeds release fees ( £200/£300)

So to pull the wool over the FSA's eyes, they now charge it "up front" instead :rolleyes:

clairehi

Yup, the Post Office/Bristol and West/BoI are doing this as well.

they call it a loan fee and offer to add it to the loan amount interest free, payable on redemption.

well dodgy.

however they are still the cheapest deal for us over the lifetime of the mortgage (assuming valuation goes the right way) even taking that into account.

Peelerfart

One further benefit of this product is to increase the banks profits.

Which. of course, as we all know is a benefit to us all !!

koexelek

It's even better for the lenders now.

Where as that deeds release was paid when the mortgaqge was repaid, it is now charged up front, with the borrower paying interest on it for the full term :cool:

A classic case of the lenders putting two fingers up to the regulator

Dan_1976

The FSA act and who pays once again! The banks? noooooo we cant upset them!