Mortgage Exit Fee

As there is some confusion as to what a mortgage exit fee is, helped in part by lenders trying to muddy the water so that people aren’t sure whether they can reclaim the fee or not we have summarised below what can and can’t be reclaimed.

What are Mortgage Exit Fees?

The mortgage exit fee is a charge by lenders to cover staff, legal and admin costs when a mortgage is repaid. It is called a variety of different names by lenders. So even if is not called a Mortgage Exit Fee, but instead is called one of the following names, you will still be able to claim a refund:

• Deed release fees
• Sealing fees
• Final Administration Fees
• Discharge Fees
• Final Redemption Fees

This list isn’t and can’t be comprehensive as each lender will call the fee by a different name. In general, look for the fee you are charged when you pay of your mortgage that is a fixed fee, generally in the region of £300-£500, this will be your mortgage exit fee.

What a Mortgage Exit Fee is NOT

Mortgage exit fees are often confused with Early Redemption Penalties. However these are not the same thing. Early redemption penalties are payable when you switch a mortgage during the lifetime of a special deal, for example a 2 year fixed rate.

Early redemption penalties are based on a % of the mortgage rather than being a fixed fee charge and are typically only charged in the first few years of an introductory deal.

At the time of writing, early redemption penalties cannot be reclaimed