Mortgage exit charges

lisyloo

I am in the same posistion (going from alliance & leicester to britannia).
There are also a couple of other benefits to point out.

1) A&L do monthly interest (I think) whereas Britannia are daily. This means if you make overpayments with A&L you need to try and make them at the right time of the month.

2) A&L closing fees are still £295, Britannia are £110.

3) There is a loyalty scheme that Britannia do which you would benefit from if you stayed with them after 2 years.

These are not mega issues, but in my view it helps tip the balance in favour of Britannia, especially the daily interest.

Rik_S

"A&L closing fees are still £295"

They are at the moment but it could be anything at the end of your term if the past 2 years with A&L are anything to go by.


"There is a loyalty scheme that Britannia do"

Thats something A&L might learn from, although I expect its a word that they rarely use.

Brittania looks a clear winner

cloud_dog

The thing that annoys me about all this (lenders starting to increase charges for specific activities) is that most (if not all) of these activities could really be considered the 'cost of doing business', and therefore should be (and I'm sure they really are) factored into their costs and profit margin, etc.

cloud_dog

Rik_S

Just spoken to A&L customer services.

Totally unhelpful. Couldn`t explain the rise in mortgage exit fees other than it was a result of a review.

I asked what factors had increased so much as to incur a 100% rise in fees...`it was the result of a review`.

I asked again and was told to put it in letter form as he clearly could not give an explaination.

ReportInvestor

Financial Mail on Sunday continues to take the battle to Alliance & Leicester over this charge.

Mail link - Readers are still winning good will gestures from A&L of 100 quid or thereabouts

Mail link - Richard Dyson's comment about the customers who have complained to date

Complaining a lot pays at A&L who have failed to justify this charge which is really about profit maximisation. You still have a good chance of money back if you feel more comfortable complaining after you have paid the charge and remortgaged.

Click on this link to go directly to Financial Mail's draft letter of complaint

Don't give up - get even and save money.

MarkyMarkD

lisyloo wrote:

A&L do monthly interest (I think) whereas Britannia are daily. This means if you make overpayments with A&L you need to try and make them at the right time of the month.

The difference between daily and monthly interest is trivial unless you overpay. If you overpay more than £500 with A&L (and with most other lenders) then they recalculate the interest bearing balance instantly.

MarkyMarkD

cloud_dog wrote:

The thing that annoys me about all this (lenders starting to increase charges for specific activities) is that most (if not all) of these activities could really be considered the 'cost of doing business', and therefore should be (and I'm sure they really are) factored into their costs and profit margin, etc.

cloud_dog

I don't agree. The costs of opening and closing accounts are tangible and real, and customers who open/close accounts more frequently are less profitable than those who remain loyal over the longer term. That's why, IMHO, entry/exit charges are becoming more common, and more significant, as customer loyalty across the banking industry continues to decline.

payless

MarkyMarkD wrote:

The difference between daily and monthly interest is trivial unless you overpay. If you overpay more than £500 with A&L (and with most other lenders) then they recalculate the interest bearing balance instantly.

We have had this discussion before - it can make more of a difference on shorter term repayment mortgages - even ignoring possible overpaments ( ie approx 0.4% on a 10 yr repay mtg) although there is a faster capital repayment in early years ( but not sure thats makes taht much difference if taken to end of term anyway)

On 25 yrs rep[ayment it generally appears to "add" about 0.1% on the rate- but again part of this is then reflected in slightly faster capital repayment .

ReportInvestor

MarkyMarkD wrote:

entry/exit charges are becoming more common, and more significant, as customer loyalty across the banking industry continues to decline.

Martin and MSE are starting to cost us money :rotfl: .

I agree with MMD that this is the way things will go. But let's have more transparency. We need to see the charges up front before we sign up.

michaels

There are two issues here:
1) Do the fees represent a fair reflection of the costs - I'm not sure but there seems to be a marketing incentive to have as low a headline rate as possible and then 'recover' the cost of this through fees, and exit fees are obviously better sales wise than entry fees (dettering people from leaving as opposed to dettering people from coming) so a cynic might say they may more than cover costs
2) Is it reasonable for the fee to be increased by 100% whilst the borrower is locked in. I think the answer to this is obviously no, hence why the A&L move is so unpopular and being challenged