London’s homeowners being stung by exit fees

London’s homeowners are being charged as much as £295 in exit fees when financially conscious consumers look to change their mortgage.

Sources at ING Direct claim these exit fees are often up to eight times more expensive than the actual amount spent by the banks in reorganising the finances, with the average exit fee costing the mortgage buyer £187 when all the banks pay out is £35.

Lindsay Sinclair, chief executive of ING Direct, told The Evening Standard that an exit fee which is more than £35 is “just another way to boost profits” for banks and building societies.

“There is very little work involved for the lender when a customer wants to redeem their mortgage. The majority of the paperwork is handled by their solicitor who makes a separate charge for this,” she said.

The Financial Services Authority is apparently looking into the matter but as of yet has not issued a ruling on limiting exit fees.

A spokesman said that if deemed necessary, a poorly behaving lender could be “named and shamed”, adding: “If the cost charged is greater than the actual cost, then it is potentially a breach of the contract and could be unfair.”

Tags: ING, ing direct, exit fees.A spokesman, profits, Lindsay, standard, executive