Mortgage Final Repayment Charges - worth knowing!

DeepBlue_2

Just a word of warning to anyone with a mortgage - I have recently repaid my mortgage with Barclays/Woolwich for which I was charged a Final Repayment Fee of £275 - an increase of over 40% on the £195 listed in the documentation when I took out my mortgage 13 months earlier.

Unlike a fee for going overdrawn, for example, I have no choice as to whether I repay my mortage, whether that be now or in 25 yrs time. Having written a couple of letters of complaint about what I believe to be an unlawful charge (from research on this site and various newspaper articles on the subject), I have just been called by the bank to say that it is their legal right to increase their fees to any arbitary amount they see choose. Unlike a rate change, they don't give you adequate warning of fee changes to allow you to arrange to repay your mortgage before the new fees are introduced. By my calculations, if Barclays increase their Final Repayment Charge by the same percentage every 13 months, at the end of my mortage term, I would have to pay a fee of £375,485 (that's the fee, not the mortgage, which incidentally was about £80,000).

I have yet to establish a solution to this, other than waiting for the FSA to state rather more succinctly that this practice is unlawful, but I believe it is worth being aware of, particularly for anyone who, like me, switches their mortgages every couple of years.

On the up side, whilst at the start of the conversation the bank chap was pretty adamant that any part of the charge would not be reimbursed (I am asking for the difference back), 15 minutes later and with a bit of persistence, he is going to look into it further... not quite a result but a step in the right direction!

herbiesjp

Have a look at this thread - may give you some help with your cause:

http://forums.moneysavingexpert.com/showthread.html?t=100358

Coupon-mad

This may help your argument:

http://news.bbc.co.uk/1/hi/programmes/moneybox/5112942.stm

HTH a fellow Brightonian

TangentMan

DeepBlue wrote:

Unlike a fee for going overdrawn, for example, I have no choice as to whether I repay my mortage, whether that be now or in 25 yrs time.

Have a look at the other threads for useful approaches to the lender, but
I didn't think Barclays charged if the loan went to its natural term (i.e. "25 years time").

DeepBlue_2

Thank you all - I have looked over the links which were very interesting - the BBC article highlights the potential illegality of making a change to the charge without obtaining the customers agreement which I think is a good sign - If only it was a more definite and undisputed breaking of the law.

I also found some interesting information in an article in the Sunday Times Money section some weeks back, but foolishly threw it out... TangentMan - you may well be right about them not charging if the mortgage goes to term - I've never waited that long and probably never will! I may do a bit of research to find out even so.

Thanks again and enjoy the summer weather