The Council of Mortgage Lenders (CML) said it had worked with the FSA on the statement, which gives both consumers and lenders a clear picture of the FSA's expectations, and a practical menu of options for the treatment of borrowers.
The CML sees this approach as helpful, in that it gives a consistent framework for the whole industry to use, while still allowing lenders flexibility to choose their approach depending on their own individual circumstances and contractual terms.
The CML emphasises (and the FSA accepts) that varying fees is not necessarily wrong. However, consumer reaction to recent rises in exit fees demonstrates how important it is that fees and charges are transparent upfront, and that consumers are made aware of the basis on which they may change.
Michael Coogan, director-general of the CML, commented: "We welcome the FSA statement as a practical way forward. Transparency in fees and charges is unequivocally a good thing in terms of ensuring that consumers understand what they will need to pay at various stages.
"Lenders will ensure that in future their exit fees, and the terms on which they may be varied, are absolutely clear to borrowers upfront. But, in the UK market, where competition is tight and price competition is already fierce, the effect is unlikely to have a dramatic impact on the overall cost of a mortgage."
David Fields, head of banking and corporate relations at the ifs School of Finance, said: "It’s reasonable for lenders to charge exit fees when borrowers pay off their mortgage or switch to another lender as this clearly involves staff and general administration costs. However, borrowers should know when they sign up for a mortgage what fee they will pay on exit – it’s essential that mortgage lenders treat their customers fairly."
