There's been a lot of talk and debate over the last few years regarding mortgage Exit Fees. An Exit Fee is a charge levied should you wish to dump your present mortgage and go with another provider who perhaps is offering a better overall deal or lower interest rate.
The main problem with these exit fees is that when current mortgage holders signed for their mortgage the fees were perhaps advertised as £50 or less. But the small print in a mortgage contract allows the lender to raise them at their will, and this is exactly what's happened in many cases.
Consumers are rightly up in arms as they not only see this as another example of profiteering from the banks but also unfair as the goalposts are being moved once the game is under way. For example, one of the reasons you may have signed up to mortgage A instead of mortgage B was the lower exit fees with the A mortgage.
High Exit Fees - Good Fees?
Mortgage experts however feel that high exit penalties for some plans are not really a problem as the mortgage deals themselves are very good. So if you do your research on a certain mortgage and all the aspects of it are great, really suiting your financial situation why worry about a high exit penalty if the chances of you dumping the mortgage are slim?
The only trouble we'd have with that argument is that a mortgage is normally always a long term proposition and a lot can change in both the market and your own personal financial situation over 5, 10 or 15 years therefore flexibility with money matters is so important.
Summary
Whatever your view on Exit Fees for mortgages they are only one of the inputs you should consider when evaluating any deal so don't initially be turned off by deals with high fees such as these. Take them into the context of the overall costs.
Finally, is there a way to get out of these high Exit Fees or at least have them reduced to the same amount as when the deal was first signed? Yes -
- Write a polite letter to your mortgage firm stating the increase in fees is unfair especially as the increase is (likely) to be several hundred percent
- Would they please consider reducing them to the amount that was on the original agreement that was signed
- If you do this there's a better than 75% chance they'll back down – Good luck!
