No change in exit fees, despite FSA concerns

12 October 2006
Despite calls from the Financial Services Authority (FSA) for mortgage lenders to justify the large exit fees attached to home purchase contracts, little has happened to change things.

The FSA demanded lenders give greater transparency to the exit fee market earlier this year but there has since been little or no change in the amounts or the ways in which institutions charge fees, according to

Conversely, lenders like Britannia and Standard Life have actually increased their fees rather than making any attempt to soften the blow these charges have on the average consumer.

"It is appalling that no providers have yet responded positively," remarked Louise Cuming, the head of mortgages at the financial comparison site.

"The FSA needs to get tough and should urge all lenders to guarantee exit fees will remain at the level at which borrowers enter the contract.

"This will ensure there are no nasty surprises when people decide to terminate the contract - a stance that I hope to see in the FSA's announcement at the end of this month."

Ms Cuming singled out ING for particular praise after it entered the mortgage market with a two-year fixed-rate "no frills" product.

Although this new home purchase loan did not offer a market-leading rate (4.95 per cent), it had no hidden fees and this, Ms Cuming noted, was "a step in the right direction and is to be applauded".

To compare mortgage deals, click here.

track© Adfero Ltd