Mortgage Exit Fees successes and failures

dunstonh

Pity about the Nationwide though, wrote send them a template letter for my mortgage closed in 2006, got a reply back today saying sorry "we consider the admin charge of £90 fair and was put in place to recover the costs we incur when redeeming a mortgage account".

Good about the £100 but why pity about the Nationwide? The fact you are not getting a refund from them means they did it correctly in the first place. I would rather have a provider that does it right and fairly first time round than one that has to be contacted later to get a refund.

oldmandave

dunstonh wrote: »

Good about the £100 but why pity about the Nationwide? The fact you are not getting a refund from them means they did it correctly in the first place. I would rather have a provider that does it right and fairly first time round than one that has to be contacted later to get a refund.

Yes it is good to have a provider that does it right, but I still think £90 is a bit excessive for admin fees, or is that just me?

_Andy_

oldmandave wrote: »

Yes it is good to have a provider that does it right, but I still think £90 is a bit excessive for admin fees, or is that just me?

If you felt it was excessive why did you take up a mortgage contract that specified a fee of that amount?

oldmandave

_Andy_ wrote: »

If you felt it was excessive why did you take up a mortgage contract that specified a fee of that amount?

Not every mortgage is perfect, they have good points and bad points, unfortunately for me one of the bad points was the admin fees, OK they may not be 'excessive' but I still consider it a lot.

_Andy_

oldmandave wrote: »

OK they may not be 'excessive' but I still consider it a lot.

Clearly you do -

oldmandave wrote: »

but I still think £90 is a bit excessive for admin fees

dunstonh

oldmandave wrote: »

Not every mortgage is perfect, they have good points and bad points, unfortunately for me one of the bad points was the admin fees, OK they may not be 'excessive' but I still consider it a lot.

When you buy a mortgage deal you should cost in the setting up charges and the exit charges as well as the cost and interest rate in between.

It wasnt uncommon for lenders to perhaps offer a lower set up charge but a higher exit charge as a way of making sure that when your deal ended you would stay with them. Buy another deal with the same lender, you dont pay the fee. Buy one with another lender and you do.

So, the size of exit charges varies a lot but you need to put it in context with the setting up fees.

If you had a deal with say a setting up charge of £250 and an exit charge of £250 and another deal that had a setting up charge of £400 and an exit charge of £150, which would you prefer? (assume interest rate same). Also, remember that a lot of consumers buy on league tables and dont look at the full detail. So, £250 up front looks cheaper than £400 up front. Even though the costing of the deal taking everything into account is worse.

So, the exit fee isnt all about paying for the admin at the end. Its spreading the cost of providing the deal. That is generally not happening as much now though and is partly one of the reasons why admin charges have gone up at the front end.

MarkyMarkD

Thanks, Dunston. I've been making this same point throughout this thread - to little avail, it would seem.

Whilst it's obvious to you and me, that it is just as "fair" to charge £0 up-front and £500 at the end of a mortgage, as to charge £500 up-front and £0 at the end of a mortgage (ignoring the time value of money), others will continue to have the daft attitude that the former is "unfair" and that the £500 should be avoided, whilst the latter is "fair" and should be preferred.

Obviously the former is actually a far better deal for the customer, both because of time value of money, and because the £500 is never incurred at all if you stay with the lender (given that many do not charge it at the end of a mortgage's natural term - a far better, and fairer, deal all round.

moggy72

Mikemalo wrote: »

I have just saved myself £120 on my mortgage exit fees by using the template supplied by martins money. It was with A & L and they quoted me £195 initially but I got it down to £75.
Mike

Where can I find the letter template? I am currently going through the same thing with A&L. Thanks in advance

SCAMPIDOODLE

I remortages from B&B to Nationwide in 2004, then we moved in 2006 so got new mortgage with YBS. can you claim back these charges if you dont have any deatails, amounts charged or account numbers etc. I have no paperwork at all.

_Andy_

SCAMPIDOODLE wrote: »

I remortages from B&B to Nationwide in 2004, then we moved in 2006 so got new mortgage with YBS. can you claim back these charges if you dont have any deatails, amounts charged or account numbers etc. I have no paperwork at all.

Why do you feel you can reclaim them?