Abbey’s exit fee is rising from £179 to £225 from 11 May where the repayment fee of £99 has been combined with the mortgage discharge fee of £80 – with nearly an extra £50 added onto the total.
Although Abbey said the increase brings the rate broadly in line with its competitors’ fees, lenders such as Nationwide and Skipton Building Society only charge £90 and £75 respectively. Alliance & Leicester has the highest exit fee at £295.
An Abbey statement said: “We have not increased our repayment fee for more than two years and the new rate more accurately reflects the processing and administrative costs involved. The old mortgage discharge fee, which was £80, has not changed since 2003.
“We have been notifying customers of a change to the repayment fee since February this year. Customers are currently being informed in their Annual Mortgage Statement with a clear and simple table of fees and charges.
“We are also mailing a letter to other mortgage customers to let them know before the new fee takes effect on 11 May.”
Halifax’s exit fee will go up from £115 to £150 as of 1 June. Paul Fincham, spokes-man for Halifax, explained: “The fees are amended to reflect rising processing costs.”
But the fees have been criticised for lacking transparency where lenders may not charge these fees when the client enters the deal but might start charging it when the client wants to leave.
Richard Humphreys, principal of The Mortgage Trader, said: “This is just an excuse for lenders to make more money.
“The statement from Abbey that the increase brings the fee broadly in line with its competitors suggests this is more about getting extra cash out of the customer rather than a necessity to up the fee.”
