Mortgage set up fees

garilee

Please bear with me I am very new to all this!
We had a tracker mortgage for 2 years this expired, we contacted the lender and they advised another tracker mortgage but with a set up fee of £450.00 although we remained with the same building society. Could anyone please advise if we can claim this back?

Cazza

Sorry, but no. If you talk to the lender, they will probably have rates available with no set up fees, but a higher rate. If you want the better rate, you have to pay the fee. Most lenders have two or three variations with this. It all depends on the sive of your mortgage, sometimes you're better off paying the highe fee, sometimes not. Give us a shout if you want a hand comparing different rates and fees!

dunstonh

Could anyone please advise if we can claim this back?

Putting it another way....

you bought a TV 2 years ago and you now want to know if the shop will give you another new TV free of charge.

You are choosing to buy a new retail product and like any retail product you pay for it. If you dont like the charge, you dont buy it.

minimike2

The number of posts of this nature lateley just show how much we have turned into "Compensation Culture" in this country.

Everyone wants something for nothing. Gets my goat!

_Andy_

Agreed. I don't understand why people pay fees etc quite happily then a couple of years later suddenly feel it's 'unfair' etc.

minimike2

I understand why - Its because of the press. Someone starts it off, then everyone gets on the bandwagon!

rzr101

minimike2 wrote: »

I understand why - Its because of the press. Someone starts it off, then everyone gets on the bandwagon!

Agreed. Sadly.

bankersmug

I must admit I do have some sympathy with the OP's point. We expect banks to make money from us; it is called interest. Fair enough. We expect fees when signing to a new lender.
But it seems very odd that they should require further fees to the magnitude of hundreds or perhaps over a thousand pounds to merely continue with the loan, albeit at a different interest rate.

What are the costs involved in a remortgage?

minimike2

That is NOT what the fee is for.

The fee is mereley a feature of the product. You pay the fee to get the interest rate, NOT for the "costs" or "work" involved. If you dont want to pay a fee thats FINE, take the higher rate option with no fee that most lenders offer.

dunstonh

I must admit I do have some sympathy with the OP's point. We expect banks to make money from us; it is called interest. Fair enough. We expect fees when signing to a new lender.
But it seems very odd that they should require further fees to the magnitude of hundreds or perhaps over a thousand pounds to merely continue with the loan, albeit at a different interest rate.

As has been made very clear in recent times, the banks are not making profit on the interest rate. Too often they are borrowing the money themselves to lend to customers and they have a choice of adding a fee at the start or adding a margin to the interest rate. the most common method is a bit of both but it is possible to get deals with higher fees and lower rates and lower fees and higher rates.

Even if they use savers money, they are only getting the net interest charge which is typically around the 1.2-1.5% p.a. However, many lenders are reporting the net interest charge as being below 1% currently. Hence why some of the fees have crept up.

If you think the banks are making 5-6% on your money then you are very mistaken.