Extortionate Mortgage Fees?

littlecash

Hi all, we remortgaged September/October last year as banks went into freefall. Whilst we were looking for products and rejected some, all of a sudden ALL fixed rate mortgages seem to come with a £2,000 charge :eek:as well as the setup fee? Or at least that's what our IFA told us. Does any one know of a past mortgage product finder to check? Does anyone (legal status) think there is a case for refund?:mad:

beecher

under what grounds to you think you could get a refund? You could've stayed on your lender's SVR and paid nothing - no-one forced you to remortgage, or to pick a product with a high arrangement fee. Depending on your LTV, there were probably products available with lower fees, but with higher interest rates, but it is a bit late to be looking at it now.

dunstonh

all of a sudden ALL fixed rate mortgages seem to come with a £2,000 charge

No they dont. Some fixed rates have increased the charge but lowered their rates. This is actually a fairer system and for many will be lower cost. Its only those with smaller mortgages that will find these more expensive.

Does anyone (legal status) think there is a case for refund?

When you walk into Currys and see some TVs at £500 and some at £2000 do you think that the £2000 ones are illegal?

You have a choice on what you want to buy and the price of the product is clearly shown before you buy. If you dont like the price dont buy it. If you want a low upfront fees mortgage then buy one. You dont have to buy a large upfront fee mortgage. You have the choice.

dfh

Beware of those that charge a percentage of the amount lent as a fee.They can turn out to be very expensive.

Mrs_Bumble

What interest rate did you get for that fee?

jamesd

Read buying points. In the UK that's done by paying a varying initial charge that changes the main interest rate, so you choose a different mortgage product instead of buying points off the interest rate on a standard one. If a lender wants to hit a specific main interest rate like say 4.99% they might adjust the initial charge to subsidise that rate if they can't quite make it.

There's no case for a refund because you're benefiting from the rate you purchased for the initial charge for as long as you have the rate.

Those that make the charge a percentage of the amount lent are most transparent because that clearly links the cost of the reduction in rate to the amount borrowed. Without that link the mortgage will be of different profit levels for the lender depending on the amount borrowed and that may make them more or less keen to lend depending on mortgage value.

maninthestreet

It's not clear from the OP's initial post whether or not they re-mortgaged, and what fees they paid if they did re-mortgage. Assuming the OP did re-mortgage and had to pay fees, no refund would be due as they must have been aware of these fees and agreed to pay them.