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Reclaim Mortgage Exit Fees

Reclaim Mortgage Exit Fees

Category: Mortgages

Updated: 31/10/2008
First Published: 03/08/2007

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Financial Services Authority (FSA) has urged borrowers who think they have been charged higher exit fees than the one originally set out in their mortgage contract to reclaim them. The controversial fees, charged by mortgage lenders to borrowers ending their current deal, range from £50 to around £300.

Back in January this year however, the FSA issued a Statement of Good Practice, which said that customers were being charged higher exit fees than they had expected. The FSA set out how it expected future customers should be treated and called upon mortgage lenders to review their exit fee charges by the end of July.

As a result, some of the UK's biggest lenders have since scrapped their charges for new customers.

Exit fee – 31 JulyAction taken

Royal Bank of Scotland £225Withdrawn
Cheltenham & Gloucester£225Withdrawn
Halifax£225Withdrawn
Abbey£225Renamed to mortgage account fee
Nationwide BS£90Fee remains
Norwich & Peterborough BS£205Fee remains
Giraffe Money£195Renamed lending fee

However, other lenders, such as Abbey have simply recategorised their exit fee, while Nationwide has decided to keep it.

"It is disappointing to see that whilst some lenders have managed to eradicate their fee others are still making a profit at their customers' expense," says Moneyfacts spokesman Andrew Hagger.

Take action

The FSA urges customers who think they have been charged a higher exit fee than the one stated on their contract when they signed up to the mortgage, to contact the lender to find out if they are eligible for a refund of the difference.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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