Can A&L charge me to keep my mortgage with them?

atc45

There are lots of threads about exit fees, but I decided to stay with Alliance & Leicester when I "deal-hopped" about a year ago. Put me on a new 2 year fixed rate, but charged me £750 for the privilege. Is this reclaimable?

Any suggestions either way greatly appreciated. Ta.

(Sorry if this has already been covered elsewhere, couldn't find it.)

AndrewSmith

Why would it be reclaimable? It is a fee charged for that particular product.

You were the one with the choice of whether to pay it or not. If you didn't want to pay it then you had the choice of other products.

It is not reclaimable as it is not a punitive penalty and is something you were made aware of up front before taking the product.

MarkyMarkD

It's been covered about 20 times in each of the existing exit fee threads.

A&L are not "charging you to stay with them". Originally you signed up to a mortgage with 2 years at a cheap rate followed by 23 years (or whatever) at a higher rate.

A&L would happily let you stay with them, on those original contract terms which you agreed to, and if you did so you wouldn't have to pay them any additional fees. Equally well, you could have redeemed your mortgage and you wouldn't have had to pay any extra fees (apart from the MEAF, but that's a different story).

Instead, however, you are choosing (as Andrew correctly states) to ask them for a change in the terms of your mortgage. Those changes are greatly to your benefit, as you'll pay a far lower rate on your mortgage than you originally agreed. And in exchange for agreeing to give you a new "cheap" rate, A&L ask you to pay them a fraction of the benefits you will receive in the form of a switcher/arrangement fee.

If the benefits of the product switch didn't exceed the switcher/arrangement fee, you wouldn't have bothered switching. But because they do, you have exercised a free choice and opted for the combination of lower rates and a fee. You can't have one without the other.

spurs_nut

When will people start seeing through their greed and start reading things and understanding them properly before signing on the dotted line.

honestly!