C&G stated its ‘closing admin charge’ would be removed with immediate effect and would no longer apply to new lending. However, it confirmed customers with existing mortgages with it would still be charged the exit fee in their contract.
A spokesperson for C&G said: “The removal of the exit fee follows a review of our fee structure and will be a popular move with our clients. We are the first major lender to scrap exit fees for new customers and we have made the decision in response to the FSA’s best practice guidance.”
The FSA took lenders to task in February for escalating exit fees and demanded they clarify their positions on such fees on current contracts in the interests of ‘Treating Customers Fairly’. A second deadline is fast approaching on 31 July for lenders to justify their fees for future business.
The FSA has stated exit fees must ‘represent the true costs of the lender’s administration services’.
James Cotton, mortgage specialist at London & Country, said: “Some lenders have reduced their fees and I’d be surprised if C&G was the only lender to scrap them.”
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