Mortgage exit charges

payless

michaels wrote:

I particuarly like the bit about redemption quotes as the fee is of course still payable if you kept the mortgage till term.

I notice that recent offers ( with the fee mentioned - "currently £295 " ) actually says "will be payable if you repay your mortgage in full early"

not saying they won't charge it in other circumstances - just providing info from a recent offer

payless

If anyone interested- Nationwide ( who just introduced a £90 fee)
illustrations state

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" A non-refundable administration fee may be payable to Nationwide when you repay the mortgage. This fee will not be payable if, at the time of repayment of this mortgage, you take out a new Nationwide mortgage or you have 10 years or less remaining of the original term of this mortgage . The fee is currently set at £90"

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obviously not promoting one lender over another- but interesting to see the differing terms

gav1

I've just heard from A and L who "as a gesture of goodwill etc" will reduce my redemption fee to £195 from the £295. Looks like a standard letter - I'm guessing they try to get £295 out of you but if you make a fuss they'll knock a ton off. There's even a cut out and return form at the bottom (rather like school trip letter) asking me to sign within 28 days if I'll accept.

Do I go for this then?

lisyloo

I would go for it personally, but obviously that's just my opinion.

Looking at it pragmatically, £100 is a good return for the time you've already spent. I reckon you'll have to work a lot harder (and possibly not get anywhere) if you want more.
£195 fees does not sound too unreasonable to me.

Rik_S

gav1 wrote:

I've just heard from A and L who "as a gesture of goodwill etc" will reduce my redemption fee to £195 from the £295. Looks like a standard letter - I'm guessing they try to get £295 out of you but if you make a fuss they'll knock a ton off. There's even a cut out and return form at the bottom (rather like school trip letter) asking me to sign within 28 days if I'll accept.

Do I go for this then?

I`ve just had a letter from A&L stating that they they cannot agree to now reduce or waive the redemption charge.

The last paragraph rambles on about the included leaflet that explains how to take this matter further....ummm..no..its about home insurance.

Shambles..typical.

I`ll be on the phone to customer relations again on Tuesday.

cjanderson

i'm about to remortgage from the A&L as well. Even if i stayed with them and swictedh to their remortger deals, I would be charged £395 fee PLUS £250 admin fee (so really, no different to the £295 exit fee)

All a bit poor really. I was okay with the £150 exit charge i signed up to 2 years ago, not happy about it pretty much doubling. Glad to see some people have got it refunded. Then again, you have to pay don't you? then argue afterwards as thats how much they would move to the new mortgage company (along with your mortgage amount)

MarkyMarkD

CJ

You aren't really comparing like with like.

Your alternatives are:

- take an A&L product with a fee, and pay £395 fee plus £250 admin fee = £645; or
- move the mortgage elsewhere and pay the new lender's fee (say £395), plus valuation fee (say £300), plus legal fees (say £250), plus the £295 = around £1,240.

I'm surprised if there's a product available from a different lender which is sufficiently good value to cover the extra fees, or which doesn't have the extra fees but is still a cheaper rate.

I think the only exception would be if you have a relatively small mortgage, and the new lender's product is a "no fees" offering.

I'd be interested to see the maths which make you think it's better to remortgage.

I would almost always recommend that people consider staying with their original lender as the costs of moving are relatively material. It's only if you are with a lender (like Halifax, for example) which do not let their existing borrowers have their best deals, that it is generally worth moving away to a new lender.

michaels

Hmm - I usually find it is best to move products anyway - at least in the past there was always a fee free discount offer availabe at a similar or better rate than the 'stay with us' rate available, however the high exit charges are now almost tipping the balance -which is no doubt why they are there!

cjanderson

MarkyMarkD wrote:

- move the mortgage elsewhere and pay the new lender's fee (say £395), plus valuation fee (say £300), plus legal fees (say £250), plus the £295 = around £1,240.

I'm surprised if there's a product available from a different lender which is sufficiently good value to cover the extra fees, or which doesn't have the extra fees but is still a cheaper rate.

have found one which is 4.75% and absolutely no charges to sign up, no legals, valuation refunded, no arrangement fee. So just have to check that over 2 years the slightly extra interest does cover the costs of the fees.

MarkyMarkD

Is that the Britannia one? It's certainly a good deal for the two years. So you would save £305 up-front, and then pay an extra 0.01% for the two years. Likely overall saving around £285 on a £100k mortgage and slightly more on a smaller mortgage size.

I take it back - it is worthwhile for you to remortgage, if your intention is to keep the loan purely for the two years before remortgaging yet again.