19 Dec

Exit fees clampdown is only partially successful

Exit fees clampdown is only partially successful

Moves from the Financial Services Authority (FSA) to clamp down on exit fees have been only a partial success, it has been claimed.

According to online mortgage firm Mform.co.uk, many borrowers have benefited from lenders, including Royal Bank of Scotland and Lloyds TSB scrapping fees altogether.

However, at the same time, lenders who are still charging exit fees have increased the cost of these by around 33 per cent in the last two years.

These now range in cost from anything from £100 to £295, Mform said.

Francis Ghiloni, marketing and business development director at Mform.co.uk, said: "It is good news for borrowers that some lenders have scrapped exit fees, however it is clear that these charges don’t relate to the cost of administration when closing down a loan and borrowers are waking up to the fact that these charges are really just part of the price of the mortgage deal."

He added: "Borrowers who regularly remortgage and move from lender to lender need to take account of exit fees as well as application fees and other costs which will have an impact on the true cost of their loan."

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