closure admin fee

Worried_of_wakefield

hi all, with just over £1000 left on my mortgage we enquired with Santander as to a final settlement figure to pay off our mortgage. Surprisingly we were informed this would incur a £250 'admin fee'. As we are a non tie in SVR mortgage we fail to understand why this should be. Is this normal

kingstreet

What did you agree to when you took out the mortgage, or changed to a new product during the mortgage term?

The FSA ruled the lender could not increase its discharge fee, it could charge only what was agreed to at the outset, or the later fee if you changed to a new product during the mortgage term.

You would need to revisit your original mortgage offer, or any key facts illustration applicable to a product change.

dunstonh

As we are a non tie in SVR mortgage we fail to understand why this should be. Is this normal

Yes it is normal. It should appear on your original offer letter or the last deal you bought. (the latest deal takes priority over earlier contracts).

As kingstreet mentions, the FSA looked at these a number of years back and ruled that the same charge that appeared on the contract should be used. The lenders since have followed that ruling.

jamesd

So long as it's the original amount it's fine. You can dodge it by keeping the mortgage going as long as possible with a low balance. That way inflation continues to reduce the real value and you get a nice stream of on time reports on a credit account with long history added to your credit reports.

Worried_of_wakefield

Thanks, everyone, and I really like jamesd's suggestion of running the debt down to say a £1 and let them wait 10years for the admin fee....sort of sweet revenge that appeals to me!