Sneaky banks adding fees to mortgage

Trying_to_stay_afloat_2

I have been a lurker on these boards for a couple of years now and have found the advice on here to be invaluable. I have saved loads of money. I never felt the need to join until now though.

Today I looked at my mortgage statement and discovered that the fee I have been charged to change my house insurance from my mortgage lender to another insurer had been added to my mortgage. That means I would be paying interest on the £25 charge for the 22 years left on my mortgage. I phoned them up and they said I could pay the charge now so I would stop paying interest on it. I did this but how many other people would have noticed this on their statement. They are probably trying to do this to loads of people. This is the first time it has happened to me and this is my first mortgage. Don't they have to warn people that they are accruing interest on these charges? Has this happened to anyone else?

dunstonh

They are probably trying to do this to loads of people.

They probably are but it doesnt make it wrong.

Don't they have to warn people that they are accruing interest on these charges? Has this happened to anyone else?

If you check your paperwork you will see there are warnings issued that any fees added to the mortgage will incur interest. Mortgage statements usually have a sub account for fees and you can see the amount of interest being added as well.

You have done the right thing in paying it but its not exactly sneaky what they are doing. They are just catering for people that dont pay the fees up front. There are plenty of people who will not pay it unless fees are added to the mortgage.