Leading lenders are sticking to charging exit fees despite Cheltenham & Gloucester’s decision to scrap its charges on new lending.
C&G’s move comes just before the FSA’s July 31 deadline for lenders to review their fees for clients. A Money Marketing survey has found that several major lenders, including Nat-ionwide, Alliance & Leicester, Yorkshire Building Society and Britannia Building Society, say they will not cut their exit fees. HBOS, Abbey, Woolwich and Bradford & Bingley say they are still finalising their plans.
A&L has the highest fee in the market at £295. A spokesman says: “A mortgage comprises a combination of rates and char-ges and we believe it is wrong to look at one fee in isolation.
“Unlike many lenders, we offer the certainty to customers at the outset that this level will not increase. We think this is fair and transparent.”
The Mortgage Practitioner sole practitioner Danny Lovey says lenders have been building a war chest over the past year with higher arrangement fees to compensate as they knew they would have to give way or the FSA would act. He says: “This puts pressure on other lenders to come clean and remove this carbuncle from the reputation of the mortgage industry.”