Mortgage Exit Fees discussion

Scotlou

Hi, I am about to change mortgages on the 1st March, 2007. My fixed rate mortgage from my old lender ends on 28th Feb. No penalties will be charged but a repayment administration fee of £175 is payable. At the time of taking the mortgage out this figure was £100. Is this the same as an exit fee?

gozza

are you with Halifax? im changing on 1st March to Yorkshire. im in the same situation, same fees. Yes, this is the exit fees they are on about. ive written to Halifax complaining, asking to pay the original £100 as they may as well sort it out now rather than more paperwork for them later on. sneaky they know this was happening and thought they could get away with making us pay current prices!i'll let you know what they say.

Skint73

Hi

Does anyone know what the Cheltenham & Gloucester charged as a closing admin charge in April 04?

I paid £225 to change my mortgage a few months ago and know that it was originally less than this but stupidly have mislaid the information.

Thanks.

Thomas_Crown

I took out a Freestyle mortgage with Standard Life Bank in 2000 & later remortgaged in November 2003. I was charged £150.00 mortgage redemption fee which was a lot higher than the original fee on the agreement.

Unfortunately I only have the very last statement issued by Standard Life Bank in 2003 & I am not sure whether the fee on the agreement was £NIL or £40.00. Does anyone know what the redemption fee was back in 2000?

I just hope that someone has a good memory or some relevant paperwork to hand.

GavinGKS

I read your article on this with great interest and wonder if it applies to me.
I have had a mortgage with the Alliance and Leicester since 2003. I had a 2 year fixed rate that ended in 2005. When searching for a new deal the best offer was again with the Alliance. They offered a 3 year fixed rate at 4.34%. I jumped at this and took it out, good job given interest rates.
I have just looked back the paperwork to see they charged me £395 yes £395 for doing this which they kindly added to my mortgage debt. Is this a fair charge or should I try and claim some of it back based on the FSA's observations?


Cheers


Gavin

MarkyMarkD

nmunday82 wrote:

Hi there,
I was after some advice please...
You may curse me when i say this but... 14 months ago i got a Northern Rock "Altogether" mortgage (5 years fixed over 30 years), my girlfriend and i put everything on it, fees,charges,home improvements,a debt i had left over, solicitors etc. (Obviously thinking we'll be very happy together etc etc)

The girlfriend has now decided shes "unhappy & shes changed" and has move back with her parents and whilst we are still talking i cant afford to pay the mortgage alone and she is going to pay her half of the mortgage but we want to sort the situation out asap, decorate the house neutrally etc... Anyway, Northern Rock want £3294 early repayment fee, along with the closure fee of £250 and they also chuck in £1000 (bonus incentive) that has to be repaid if the mortgage doesnt last over two years?

Ideally we will sell, i will rent fresh and let it be a very hard (emotional & financial) lesson learnt, what im wondering is there anyway of avoiding the £3294 fee? After shelling out £4544 to northern rock and estate agent fees etc we'll be over £7k down off of any potential profit. (will get house valued to see impact,when we've tidied it up a bit)

Thankyou for your help/or listening to me rant ;-)

Like several of the earlier posts, this relates to an Early Repayment Charge (ERC), not a Mortgage Exit Administration Fee (MEAF) which is what Martin's article was about.

ERCs are completely legitimate and the FSA's ruling has no relevance to them. If you enter into a long-term commitment, like a 5 year fixed rate mortgage, you are committed for the 5 years. End of story. You have no basis to challenge the charge just because your girlfriend has dumped you. Sorry.

MarkyMarkD

nmunday82 wrote:

Hi there,
I was after some advice please...
You may curse me when i say this but... 14 months ago i got a Northern Rock "Altogether" mortgage (5 years fixed over 30 years), my girlfriend and i put everything on it, fees,charges,home improvements,a debt i had left over, solicitors etc. (Obviously thinking we'll be very happy together etc etc)

The girlfriend has now decided shes "unhappy & shes changed" and has move back with her parents and whilst we are still talking i cant afford to pay the mortgage alone and she is going to pay her half of the mortgage but we want to sort the situation out asap, decorate the house neutrally etc... Anyway, Northern Rock want £3294 early repayment fee, along with the closure fee of £250 and they also chuck in £1000 (bonus incentive) that has to be repaid if the mortgage doesnt last over two years?

Ideally we will sell, i will rent fresh and let it be a very hard (emotional & financial) lesson learnt, what im wondering is there anyway of avoiding the £3294 fee? After shelling out £4544 to northern rock and estate agent fees etc we'll be over £7k down off of any potential profit. (will get house valued to see impact,when we've tidied it up a bit)

Thankyou for your help/or listening to me rant ;-)

Like several of the earlier posts, this relates to an Early Repayment Charge (ERC), not a Mortgage Exit Administration Fee (MEAF) which is what Martin's article was about.

ERCs are completely legitimate and the FSA's ruling has no relevance to them. If you enter into a long-term commitment, like a 5 year fixed rate mortgage, you are committed for the 5 years. End of story. You have no basis to challenge the charge just because your girlfriend has dumped you. Sorry.

Given that she has moved back in with her family, and you intend to rent anyway, are you considering keeping the house for the remainder of the 5 years and letting it out? It might be worth doing so in order to legitimately avoid the charge.

I'm not sure whether NR will allow letting on a Together mortgage, but it's got to be worth asking them if you are interested in going down this route.

Hope that helps.

MarkyMarkD

Bernard_Coleslaw wrote:

Does anyone know what the situation is if you've changed your mortgage arrangment partway through?

I will have signed up when the MEAF with my lender was less than £100, 11 years ago. But two years ago I changed products, (same property, same lender, etc) but signed new terms and conditions that quoted a new (higher) MEAF of £195 as part of the deal.

All the guidance from Martin talks about being able to claim back the difference between the current MEAF and the original one. However, I wonder if, by agreeing to a new MEAF in-between, I can only claim any difference between the current MEAF, and this interim one?

Am I making sense?

When you switched mortgage product, you accepted the £195 fee. So, as you say, the £195 is what you should be charged. The same would apply to people who have taken a further advance since the original loan, as they accepted the higher fee as part of accepting the further advance which modified their original mortgage terms.

You sound like you haven't yet redeemed, so you won't have to claim anything back in any case - your lender will simply charge you £195 when you redeem.

MarkyMarkD

GavinGKS wrote:

I read your article on this with great interest and wonder if it applies to me.
I have had a mortgage with the Alliance and Leicester since 2003. I had a 2 year fixed rate that ended in 2005. When searching for a new deal the best offer was again with the Alliance. They offered a 3 year fixed rate at 4.34%. I jumped at this and took it out, good job given interest rates.
I have just looked back the paperwork to see they charged me £395 yes £395 for doing this which they kindly added to my mortgage debt. Is this a fair charge or should I try and claim some of it back based on the FSA's observations?


Cheers


Gavin

£395 was a product fee, not a MEAF.

I am very surprised you think you've been ripped off by paying £395 for what is now obviously a very attractive fixed rate!

You don't have any basis for challenging this. If you choose to switch products, then you have to pay whatever amount your lender asks for.

Bernard_Coleslaw

MarkyMarkD wrote:

When you switched mortgage product, you accepted the £195 fee. So, as you say, the £195 is what you should be charged. The same would apply to people who have taken a further advance since the original loan, as they accepted the higher fee as part of accepting the further advance which modified their original mortgage terms.

You sound like you haven't yet redeemed, so you won't have to claim anything back in any case - your lender will simply charge you £195 when you redeem.

Thought as much, and I'm absolutely fine with that. Martin's article does, in my opinion, need to make this perfectly clear as I suspect this might apply to a lot of people who've switched products. The term 'original MEAF' is a little misleading.

I don't mind paying what I've agreed to!

Cheers

BC