Product Transfer Fees

Riche_2

Can anyone help Please. My fixed rate Mortage comes to an end shortly and in response with the same mortgage company the Halifax I have Opted for a product Transfer. I received all the details this morning and they have charged me £999 for the pleasure of my broker doing all the work. The notice from the Halifax is computer generated. Surely this is the same as the banks etc charging for exit fees and bank charges? They have not done any work at all. Are they allowed to do this as it appears to be Extortion!
:mad:

_Andy_

Nothing extortionate about it. You're not paying for the company to process the mortgage, you're paying for the rate.
If you think it's 'extortionate' then take a fee-free package. Not sure why people take products they don't like then moan about it.

nathanhill69

Happy

All product fees are declared upfront by the lender and are clear to see (not in any way hidden in the small print). You opted to "purchase" a new mortgage product which has these upfront costs - either you should have checked the details of the mortgage you were buying or your broker should have made these clear to you. If a broker was involved in setting this up he must have made these charges clear and also weighed up the pros and cons of paying these fees based on your individual situation.

If you don't wish to pay upfront fees there are usually other products from your lenders portfolio which have no/lower fees but the booked interest rate will be higher. Hopefully your broker has made an informed decision on your behalf but you may wish to double check with them why you/they selected this particular product.

Dan_Collins_2

No no and no and no again!

You have to look at the product and way up the fees. £999 for a 2 year product for me is not good value for money, however for a 5 year fixed I think it is good value.

Welcome to the current climate!

nathanhill69

Happy

I agree with Dan, if you are paying £999 for a two year product (although you don't say that it is) then unless it's an amazingly low interest rate combined with an amazingly high mortgage loan then £999 does not appear to represent good value. If it's a five year term then £999 doesn't seem too unreasonable (although there are cheaper ones). When selecting a mortgage you really have to sit down, read the terms and conditions/charges/interest rates/term, get a calculator out and do the maths and then make an informed decision on what mortgage suits you based on your individual circumstances. A good broker will do this for you.

At then end of the day you have to think of mortgages as products - if you buy a Sony DVD player and then after three years you decide to purchase a new Sony DVD player you don't expect them to supply it for free just because you have purchased one before, same goes for mortgages, you are paying for the costs of the lender reserving the funds and securing yourself a specific interest rate and terms and conditions for a specific term of time.

IDN101

Not sure if you payed your broker a fee too? But if so, I hope the total cost to you (ie product fee + Broker Fee) has got you a product with an overall lower (including all fees) cost than one you could source yourself???

My current lender wanted £999 product fee for a new 2 (or 3) year fixed rate at 5.69%.

Solution: Told them to whistle for it and moved to a new lender (sourced it myself)- 3 year fixed at 5.59% with NO fees at all.

Regards,
Ian

dunstonh

Surely this is the same as the banks etc charging for exit fees and bank charges?

Why?

They have not done any work at all.

Really? What makes you think no work has been done?

Are they allowed to do this as it appears to be Extortion!

Obviously you must have an understanding of economics and how morgage deals are financed to be able to make a judgement like that. What is it about the financing of mortgage deals that makes you think that paying to buy a new retail product is extortion?

Noz

That poll makes no sense.

Riche_2

Outraged

Thank you all for your replies. I do have a better understanding now and appreciate that a cost should be involved however, the reason I say they have not done any work is because my broker completed the transaction on line with the building society and immediately got an acceptance therefore computer generated. OK so I have to pay for a product, I understand that they have to make money but the rates at present are so very high and I feel that they make enough money from the interest over the years I am paying it.

My Broker has been great and has sourced me a great deal at this terrible time in this market however, I don't pretend to know about mortgages but just feel these cost are too high taking into consideration what they are going to make out of me over the years!

Thank you all

Riche_2

Outraged

_Andy_ wrote: »

Nothing extortionate about it. You're not paying for the company to process the mortgage, you're paying for the rate.
If you think it's 'extortionate' then take a fee-free package. Not sure why people take products they don't like then moan about it.

Just because you think these rates are OK doesn't mean that everyone agrees with you - I don't. I know I have the best deal that I could get and appreciate my Brokers hard work - I am making comment as to how high these charges are. They never charged me when I first took out the mortgage they were only too pleased to have my business!

Thank you for your reply all the same, it is much appreciated.
Regards