Moneysupermarket.com has called for exit fees to be reduced, following the Financial Services Authoritys call for exit fee transparency.
Louise Cuming, head of mortgages at moneysupermarket.com, says: Since the FSA called for more transparency on exit fees back in June, lenders have failed to respond.
Indeed, the only real movement within the existing market to date has been to increase these charges.
“Today, the FSA has set lenders a deadline of February 28 to make their exit fee charging structures clear to borrowers.
However, if lenders opt for the latter two outcomes, thousands of borrowers could still be subjected to unfair treatment when entering into a mortgage contract because the FSA still allows lenders the license to raise the charges without consulting the borrower.
Even with all the justification in the world, it still means people can face a nasty surprise when they decide to terminate their mortgage contract.
Indeed, despite the fact lenders have been expecting this guidance from the FSA since its June announcement they have still managed to increase fees during this time, with Standard Life and Britannia both culprits.
Indeed, in spite of the announcements imminence, Britannia has even managed to sneak in an extra rise since December 2006.
The society raised it exit fees from 75 to 110 in January 2007.
“Hopefully lenders will now fall into line and either choose to charge no exit fees or charge the original exit fee effectively they are being forced to guarantee their exit fees which is welcome news.
However, the fourth and final outcome proposed by the FSA, which allows lenders to increase current fee levels, is ludicrous.
Deeds are no longer a legal requirement and the majority of the administration involved is now conducted online and therefore the current level of fees ranging between 90 and 295 already seems extortionate.
I believe all exit fees should be reduced to reflect accurately the cost of the administration work involved.
Moneysupermarket.com urges homeowners looking to remortgage to look at the whole package not just the headline rates.
A guaranteed exit fee will ensure that the charge stays the same from the day the contract is signed and will help people compare deals.