Advice needed on Mortgage set up fee

loopyblonde

Hi,

I was hoping for some advice please if poss.

My husband and I had a 2 year fixed rate mortgage with RBS and it came to an end in April. I contacted RBS to arrange another 2 year fixed rate mortgage with them starting from the day the old mortgage finished.

When I took the new deal in April, they charged me £500 for a set up fee. I questioned it at the time and explained that I'm not a new customer and that I was simply moving to a new fixed rate as my old one expired but they still said I had to pay it. The only other option they offered me was that I could take a higher interest rate and pay no fee.

It's been bugging me for months, do you think it was correct that I had to pay this fee or has someone made a mistake? Surely it doesn't cost them £500 to set up a mortgage for a customer who's details etc they already have??

Would love some advice on this.

Thanks

MuDvAyNeX

Well they did offer you a rate with no fee, it is correct that lenders charge there customers a fee for a better rate.

In the end its your choice if you want a lower rate with a fee or a higher rate with no fee, somtimes it can be better to pay a fee for the lower rate but then again in alot of cases i get at work there isnt much difference over the deal term.

It all depends on what the fee is etc .

But yes, your lender was correct in charging you as they did offer you one with no fee, i am sure they would have had one with an even higher fee and lower rate as well

Mortgagehero

I'm afraid that this is correct. Lenders are in the business of making money and some treat their customers more fairly than others. As i'm sure your aware you are under no obligation to stay with RBS for the duration of the mortgage, it is worth shopping around to see who has the most competitive deal for your circumstance, but only when your current discounted period expires due to early repayment penalties. It may be worth finding a whole of market, fee free adviser to do this for you as this could potentially save you a lot of time and money!