Mortgage Redemption Charges

topfoz

Went to try and pay off my mortgage today and was astounded to be presented with a £199 administration charge. We are fortunate that our fixed rate ended a couple of weeks ago, so apart from the charge for changing over the deeds, we weren't expecting this. I was wondering if this comes under the 'unfair bank charges' that have been in the news so much recently. I cannot believe it is going to cost Yorkshire Building Society that much to process the paperwork to wind up my mortgage and we would not have to pay it if the mortgage was at the end of its term even though, presumably the same paperwork would need to be done. Any information, or advice would be gratefully received.

firesidemaid

similar queries have been posted before.

it seems that it is probably ok to charge this.

other people have left a £1 balance (with no interest to be accrued) so they do not have to pay this. the bank will then keep the deeds for you (hence probably what the fee if for).

check that the fee will not go up each year or be revised.

congrats on paying off your mortgage:beer:

firesidemaid

there is also a similar thread going on in the mortagages section.

here is a borrowed link for you to consider:

http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/012.shtml:D

topfoz

Many thanks for your replies and your congratulations. I did find the similar thread when searching for my post. I have read the articles about the FSA investigating these charges and am hopeful that, armed with copies of the articles I have found and using the letter on 'This is Money' we can persuade the Yorkshire to at least reduce the fee to the original one from 1995 (can't find any record of an original MEAF despite keeping all our paperwork) or maybe waive it altogether. Otherwise I shall pass it all on to the FSA. I'll try and let you know how we get on.

alanobrien

High mortgage exit fees are becoming a hot topic. £200 to close a mortgage is to much see here;

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=416828&in_page_id=8&ct=5

topfoz

Curioser and curioser. I have been investigating the removal the mortgage from the land registry, for which the YBS has offered us the use of their solicitor for an extra fee of £50 on top of that £199 admin fee. According the the land registry they don't charge a fee for this. The lender just needs to fill in form DC1 and we fill in the flip side DC2 and Bob's your uncle. They can even do it electronically if they've registered to do so. So why are they saying a solicitor is needed and why charge so much extra when this should at least form part of that £199? Am I missing something?

shelagh

There is an article in theTelegraph today, apparently, stating that unfair exit fees are to be outlawed by the FSA. I'm pretty sure that this is similar to the bank charges issue and therfore you may be wise to look into this before paying. Go to debt free wannabe forum for more detail.
Hope this is useful,
Shelagh

benny5

Reached a similar milestone as topfos, only I am with the Coventry, and made a similar enquiry last week. Their charge was £195 and here is the difference; if the remaining balance is less than £2000 the fee is waived.

Don’t yet know about the land registry bit.

topfoz

Congratulations Benny5! On further research into the forms etc for changing the land registry records, someone with a 'key number' has to apply and I think that's usually a solicitor. So I guess I'm gonna have to stump up for that one. Heyho, can't blame us for trying.

FairyElephant_2

I've been going over our mortage today - always wanted to be 'mortgage free at 40' and wondered if I would be able to manage it....and I've found that my 'discharge of mortgage fee' is £250.00!!!!!
I've got another 3 and a half years to go if I am going to make my target, so hopefully the FSA will have sorted out this disgraceful charge by then.......
Otherwise I can see me owing a fiver on my house for the rest of the term of the mortgage!
FE