Mortgage Exit Fees discussion

pthompson

Hi,

I'm wondering how far I should go back...

Have had 7 mortgages since 1985, and still have details of all the account numbers and start/end dates (is that nerdy?) -- but not the exit fees.

Is it worth going back to my earliest lenders too, or is "hiking the exit fees" only a recent phenomenon?

Thanks,
- Paul.

MarkyMarkD

prudryden wrote:

I understand that Martin is referring to both an ERC and an MEAF. If you have a normal variable rate repayment mortgage loan with a 25yr. life and you pay it off early as per contractual agreement, what does it matter if it is called one or the other? The implied definition of each is clouded anyway.

If you have a fixed rate agreement for a given number of years, then it is understandable that a penalty be charged should you wish to break that agreement.

Personally, I think it is a very good idea that Martin has initiated this action . Let's show the government, while they are considerating the new policy, that we are very concerned, not just passive about it, which would lead to a watering down of any policies due to a lack of interest.

He isn't. He's referring to the MEAF as this is what the FSA's guidance note was about. The "penalty" you say is reasonable in your second paragraph is the ERC.

MarkyMarkD

DavidWS wrote:

Thanks. In answer : We only wanted a slight increase in the facility. Our earning were well within their guidelines for that amount (and percentage) requested. The property was old but mortgage able. The proof of all this was that the Bristol & West gave us the mortgage and we also had offers from other societies. I did have a problem in my past credit history but that was many years prior to this and it did not cause any problem to those other lenders. We did apply to the Abbey first and by their actions we were FORCED to move lenders. We wanted to stay with the Abbey. This is the reason that I did not think it fair that we should have been penalised.

Whilst I understand your point of view, I can also understand Abbey's.

If people got their ERCs waived if the lender was unwilling to allow them to port their mortgage product, people would apply to port to unsuitable, or overpriced, or out of their income range, properties all over the place in the knowledge that they would thereby get their ERCs waived.

Each lender makes their own decision about credit history and its impact on your suitability as a borrower; I think the lenders would see portability as a privilege not a right.

You should bear in mind that until around 5-10 years ago (can't remember exactly when) few lenders allowed products to be ported. If you redeemed early, you had to pay the ERC. Portability was brought in by the lenders in an attempt to be fairer to those who had to move within their penalty term.

floogy99

Just saved £125.00 brilliant Martin, the system works.
All it took was a 10 minute call to Halifax, (I settled my mortgage in full last week) I didn't even have the details of the original agreement, but I contested it anyway. The Lady on the phone immediately found the original agreeement £50.00 in 1998. By the time I settled, the fee had risen to £175.00, so she is sending a cheque by return. Thanks a bunch. I'm going to save some more money elsewhere on your great site.
Floogy99

MarkyMarkD

pthompson wrote:

Hi,

I'm wondering how far I should go back...

Have had 7 mortgages since 1985, and still have details of all the account numbers and start/end dates (is that nerdy?) -- but not the exit fees.

Is it worth going back to my earliest lenders too, or is "hiking the exit fees" only a recent phenomenon?

Thanks,
- Paul.

The significant increases only occurred in the past 3-4 years. Increases before that were relatively small and likely to be considered acceptable by the FSA.

Most guidance I have seen on the subject talks about redemptions from 2003 or 2004 onwards.

Bag_Lady!

:j

MarkyMarkD wrote:

Martin's proforma letter is rubbish.

The "quote" from the FSA advice:

omits the beginning of the sentence, which actually reads:

What the FSA are saying is that if a lender states that it will only charge its current customers the original MEAF, they can only charge customers who have already redeemed their original MEAF. If they decide, instead, to charge their current customers their original MEAF plus RPI, for example, there's nothing (necessarily) wrong with that and to mis-quote a part of the FSA's advice is simply wrong.

There is no real point writing to lenders to complain until they have declared, by 28 Feb 2007 as required by the FSA, how they are going to deal with current customers. This same treatment will then apply to customers who have already redeemed, who will then be able to complain in an informed manner.

Writing incorrect complaint letters now, based on incorrect advice, is simply a waste of everyone's time.

Is it really worthwhile to write now, rather than in (at the very most) 29 days' time when you will be able to ask for the right amount in compensation?

The Woolwich, as my previous lender, already had a helpline set up for this request procedure, so it has to worth a phone call or a letter now. A 5 min call for me resulted in a refund equating to nearly £200!

Bag_Lady!

pthompson wrote:

Hi,

I'm wondering how far I should go back...

Have had 7 mortgages since 1985, and still have details of all the account numbers and start/end dates (is that nerdy?) -- but not the exit fees.

Is it worth going back to my earliest lenders too, or is "hiking the exit fees" only a recent phenomenon?

Thanks,
- Paul.

I quoted the account number(s) to the Woolwich and they were able to tell me how much was due as a refund in each case, (plus any interest) so why not try and call the relevant lenders of your mortgages and see if they are as helpful. One of my refunds refers to a Top Up in Dec 2003

Beate

Would it be helpful to compile a list of banks and their exit fees at certain times, or should everyone just phone up their mortgage company to ask? We are looking for the fee charged in 1990 by Abbey, for example.

Beate

- sorry, posted twice by mistake -

balloonist

I am lucky enough to pay my mortgage with the Halifax some 10 years early. Shock and horror they want £175 for the honour. So my little brain got to work and for £10 I've changed the term of the mortgage from the original 25yrs to one month and as such now do not have to pay the early repayment fee.:j :j :j

At least I've saved £165