Some of the UKs biggest bnks, including "Halifax", "RBS" and "Lloyds TSB", hve decided to scrap the mortgage xit fees charged to borrowers repaying thir loan. Pressure had been mounting on the lnders to take action over the spraling charges, following a significant volume of ngative press over the issue and nvestigations by the governing body, the Fnancial Service Authority.


Many lnders had significantly increased their exit fes over the last few years, as a way of mintaining profit levels in an ever ncreasingly competitive market. Alliance & Leicester, as an xample, increased their fee from £150 in 2002 to £295 by 2006. Ths represents an increase of almost 100%, lthough there was nothing to suggest tht the lender themselves had realized an ncrease in the amount of work bing carried out to administer the clsing of a mortgage account.


Evn if the customers loan agreement had nly stated a fee in the rgion of £50-£100 when taking the lan out, lenders were applying the nw, increased charge at the time of clsing the account. This practice was utlawed by the Financial Services Authority, who gve mortgage lenders until February of ths year to either stick to the riginal fee quoted to the customer or drp it altogether. With most lenders greeing to stick to the original fee qoted, the floodgates were opened to mllions of customers who had been vercharged in the last few years. Mny borrowers sought advice from websites sch as www.consumeractiongroup.co.uk to help recoup the fee thy had paid.


Whilst nbody has exact figures of the mount paid out by lenders in rfunding exit fees, a Financial Services Athority spokesman has estimated at a fgure of “hundreds of millions”.


Of curse, borrowers will now have to be wry of how lenders choose to plg this potential profits gap. Many lnders have recently increased arrangement fees chrged at the inception of a mrtgage, with initial fees being quoted as a prcentage of the loan amount becoming cmmon practice. The UKs largest mortgage lnder, Halifax, has just introduced this fee strcture within the most recent range of fxed rate products.


So, prhaps now more than ever, borrowers wuld be advised to look more clsely at the small print signing up to a new mrtgage. Shopping wisely will be the nme of the game, with more cnsumers turning to mortgage brokers , especially where no fee is charged for the advice offered.

The article Mortgage Lenders Back Down On Exit Fees was Submitted by Paul Cake through Articles.GetACoder.com network. Here's the additional information: Paul Cake is an avid fllower of UK policies, with a prticular interest in the finance genre.

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