Legality of redemption fees, help appreciated

woodingdean_gull

Hi,
I've got approximately 5 years left on my mortgage which is with the Abbey. I have been with them for the past 4 years. I am not tied to them in any deal, and was thinking of moving the outstanding mortgage to a new deal with the HSBC - their rate is about 1.5% lower than my current one.
When I asked the Abbey what costs this would incurr, they said there would be no penalties, but I would need to pay a redemption fee of £225! This seems exhorbitant and would appreciate any advice if, in view of the current outcry regarding bank charges, this is legal.
Any help would be most welcome.

mountainofdebt

There are a number of threads on this board and the mortgage-free wanabee board about this very subject.

I'm in the middle of kicking up a fuss with Abbey as well over this very matter and it has gone to the next rung of their compliants proceedure.

Given the news yesterday about the exit fees I wouldn't be surprised if Abbey were playing for time.

In your position I think I would have to weigh up whether it was worth kicking up a fuss with Abbey and potentially losing the boat on a lower mortgage deal (specially if rates go up again) or just paying it.....although I must admit I got the impression from what was being reported that reclaiming any excessive fees could be done retrospectively.

MarkyMarkD

Redeem your mortgage and move it to HSBC, and then see what happens about redemption charges - which will become clearer by the end of February 2007. As mountain says, if the £225 is found excessive, then you will be able to reclaim the difference between that and an acceptable amount.