High exit fees - should I complain

Supernova

I notice that my remortgage offer from Abbey has the wording 'Repayment fee (current fee and may change)'

Rafter

Problem is it isn't a level playing field.

The likes of Nationwide tried to keep fees low and also offer better rates for existing customers but they lost market share rapidly.

Customers were seduced by sexy rates from the likes of A&L and were less worried about the future rates and charges they might have to pay.

Similarly A&L and others got their sums wrong about the number of customers who would switch to a new lender at the end of the discount or fixed period.

People don't pop down their local building society to arrange a mortgage these days either, they use the internet or a mortgage broker or IFA to find them the best deal going, and then switch when the intro deal is over, rather than sticking with some inflated standard variable rate for the next 25 years.

People are often seduced by the lowest initial payment rather than the best lifetime deal knowing they can switch to a new provider.

'Hidden' charges such as mortgage redemption feed don't have to be included in the typical APR that lenders quote either.

Personally I feel that to level the playing field, lenders should only be able to advertise a typical APR including all fees assuming the customer only keeps the mortgage for the life of the fixed rate or discount period (including any extended tie in period) and then moves their mortgage to another provider.

No sneaky charges or tie in's that way - anyone whose used sneaky fees would immediately look uncompetitive.

Maybe Martin and his team could work on a truly impartial mortgage comparison service? I'll help design it!

R.

MarkyMarkD

Rafter

Redemption admin charges ARE required to be included in the APR quote, as they are part of the total amount payable.

Quoting APRs over the tie-in period, as you suggest, unfortunately doesn't level the playing field, unless you are comparing over exactly the same term. For fixed rate loans with fixed end dates, this is almost always not going to be the case. Who uses APRs anyway? Waste of time IMHO.

Broker comparison sites will show you the "true cost" over the tie-in period, which is the best basis for comparison IMHO.