Santander - Mortgage Account Fee ??

whiteswan

I have just had my mortgage offer through.

It states Mortgage Account Fee of £225 - however my broker said the mortgage I applied for was fee free and free valuation.

I have queried this with the broker and he says it is an "exit fee" and not an "arrangement fee" and not payable until the end of the mortgage.

Does this sound correct - the Santander document states it is for the "provision and general maintenance" of the mortgage.

This is completely separate from my brokers fee and is on the Abbey/Santander documents.

Dave

GMS

You have the choice to pay up front or when the mortgage is redeemed without adding interest.

If you don't like the fee then you can ask your broker to find another mortgage.

Santander charge it, not the broker.

whiteswan

Thank you for your prompt response.

It just didn't read correctly - my broker has been absolutely brilliant - well worth his fee - he has really earnt it.

I wasn't questioning whether the broker got the money - I was just ensuring that what Abbey had stated in the initial quote was correct.

In my tiny mind I could not differentiate between an "arrangement fee" and a fee for providing the mortgage - it sounds like the same thing to me.

Dave

kingstreet

These were originally "discharge" or "final" fees and they were added to the redemption figure when the mortgage was repaid due to a sale or remortgage.

Alternatively, they were paid at the end of the mortgage term to fund the release of the charge over the subject property.

Now, they are called "account" fees, or similar and are to cover the cost of setting-up, running and closing the account. As GMS has said, they can be paid upfront, over the term of the mortgage, or at final repayment.

They should be factored-in to the comparison of different lender/products like any other charge.

They should appear on a key facts illustration so you are aware of them before you commit to a mortgage application.

amnblog

As KS says these were originally called final fees but when the regulator got funny about lenders charging admin fees for redemption a few years ago Abbey disguised their fee by changing the terminology and giving the option to pay it upfront.

It now says

""A Mortgage Account Fee for the provision and general administration of your mortgage. This

fee can be paid on completion or deferred until the end of your mortgage. If you defer the



payment, this fee will not increase.""

You can pay it now or pay it at the end of the mortgage - makes no difference.

kingstreet

As inflation will erode the amount required and if interest is not charged on it, I suggest it is left as long as possible.

michaels

kingstreet wrote: »

These were originally "discharge" or "final" fees and they were added to the redemption figure when the mortgage was repaid due to a sale or remortgage.

Alternatively, they were paid at the end of the mortgage term to fund the release of the charge over the subject property.

Now, they are called "account" fees, or similar and are to cover the cost of setting-up, running and closing the account. As GMS has said, they can be paid upfront, over the term of the mortgage, or at final repayment.

They should be factored-in to the comparison of different lender/products like any other charge.

They should appear on a key facts illustration so you are aware of them before you commit to a mortgage application.

Yep - there is lots on this site about reclaiming the fees - I have done it myself with Alliance&Leicester, when I took out a mortgage it was about 70 quid but when I came to remortgage 2 years later it had increased to 225 quid. I along with many other s claimed the increase was unjustified and did not have to pay it. Obviously the new terminology is intended to prevent any future reclaiming.

kingstreet

IMHO if the amount at redemption was higher than that stated at the outset, the difference could still be reclaimed.

The FSA made it clear to lenders some time ago that such fees could not be increased between the two points in time.