When you ask for a redemption statement from your mortgage lender, it can come as an unpleasant surprise to see an additional charge termed ‘mortgage exit administration fee’ (MEAF), which, while it will be shown in the mortgage offer letter, is something most borrowers will have forgotten about. These can add significantly to the cost of switching mortgages.
It is estimated that the average mortgage redemption involves the lender in a paperwork exercise that costs somewhere in the region of £50, although redemption fees of over £200 are common.
Some time ago, the Financial Services Authority (FSA) (now the Financial Conduct Authority) reviewed these charges and concluded that some of these charges are a breach of the Unfair Terms in Consumer Contracts Regulations 1999.
The FSA's advice to borrowers was as follows: