The FSA has updated on how mortgage lenders have responded to concerns that mortgage exit administration fees have been increased unfairly.
It has found that most major lenders have opted either to charge a fee that cannot be varied during the lifetime of the mortgage or to remove the exit fee altogether. Other lenders will charge a MEAF which reflects administrative costs when the customer exits the mortgage.
A statement of good practice, issued by the FSA in January, highlighted that consumers were being charged higher exit fees than they had expected.
The statement aimed to stop existing customers being charged unexpected increases to MEAFs and to provide a basis on which past customers could seek compensation. It also set out the FSA’s expectation for how future customers should be treated and that lenders should review their approach to this by the end of July.
FSA managing director for retail markets Clive Briault says: “What we are seeing achieves our principal aim of stopping customers from being surprised by unexpected increases in these fees. Customers will know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be varied fairly. We will continue to monitor closely how firms treat their customers in this area.”