In a statement on the FSA website it said: ‘We do not set prices for the products we regulate and firms can vary the amount they charge for services such as mortgage administration.
‘However, when a firm changes what it charges, the ‘Unfair Terms’ in Consumer Contracts Regulation require the firm to act fairly. In the recent Statement of Good Practice we explained that terms which enable a firm unilaterally to change fees are less likely to be unfair if, among other things, there is a valid reason for the change.
‘We have examined a number of mortgage contracts and have found some lenders who we think are changing their mortgage administration fees in an unfair way. As a result we will work with lenders to discuss how they can vary these fees in a way that is fair for consumers.’ The FSA would not name the lenders in question.
Alliance & Leicester has raised its mortgage exit fee by £100 to £295 in the past year; Northern Rock now charges £250; Cheltenham & Gloucester charges £225; and Nationwide has introduced a fee for the first time of £90.
Michael Coogan, director-general of the Council of Mortgage Lenders (CML), said: “Fees are going up for a variety of reasons, one of which is the services are being charged more accurately. Another is they’re providing fees which are counterbalancing lower interest rates.”
Andy Frankish, managing director of Mortgage Talk, commented: “Consumers are the ones suffering and competitive start rates enticing borrowers are hiding the costs of arrangement and exit fees which go against the FSA’s buzzword – transparency.”
