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Realistbear

Mortgages With A Powerful Sting -- Subsidizing New Loans

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http://www.fool.co.uk/news/comment/2006/c0...m?ref=foolwatch

COMMENT

Your Mortgage Has A Nasty Sting!

By Cliff D'Arcy

March 17, 2006

Would you sign a long-term contract which included a clause that allowed the other party to charge unknown fees whenever it wanted without your agreement?
I thought not, and yet millions of homeowners have done just that without realising it! They say that "the Devil's in the detail" and, when it comes to mortgage contracts, there are some real nasties tucked away in the small print.

Standard exit fees levied by the UK's leading mortgage lenders

Lender 1996 2001 2006 % Increase

1996-2006

Alliance & Leicester 90 150 295 228

Barclays/Woolwich 50 95 275 450

Northern Rock 75 150 250 233

Abbey 50 85 225 350

Lloyds TSB/

Cheltenham & Gloucester 35 50 225 543%

Halifax 55 125 225 309

NatWest 65 85 225 246

Royal Bank of Scotland 80 75 225 181

Bank of Scotland 50 150 195 290

Bristol & West 50 100 195 290

Yorkshire Bank 0 0 195 N/a

Nationwide BS 67 0 90 34

Average 1996: 56 2001: 89 2006: 218 293%

The root of this problem is that exit fees are not fixed in the mortgage agreement, and lenders claim to have complete freedom to increase them at will. However, I believe that this contractual term falls foul of the Unfair Terms in Consumer Contracts legislation, because asking borrowers to pay an unknown amount at some point in the future is blatantly unfair.

Scammers? :angry:

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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