Lenders' fees 'over the top'
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Your support makes all the difference.Cheltenham & Gloucester yesterday became the latest mortgage lender to impose steep hikes in the cost of telegraphic transfer fees, with a new £30 charge introduced with immediate effect. The move follows a warning that lenders are earning profit margins of more than 1,000 per cent on the little-known fee, which costs borrowers £23m a year.
A handful of lenders have raised telegraphic transfer fees, payable by borrowers when the loan is transferred into their solicitors' accounts, to almost £50, even though the transfers cost them almost nothing.
"Although most banks charge around £25 for one-off electronic payments, large users such as mortgage lenders can negotiate a discount of around 90 per cent, so the real cost is under £3," said Ray Boulger, of independent mortgage broker John Charcol.
The worst offender is BM Solutions, part of the Halifax Bank of Scotland group, which charges £49 for each transfer, a profit margin of more than 1,500 per cent. Platform Home Loans charges £45, while the fee at West Bromwich Building Society is £40. Nationwide Building Society is also a high-charger, with a transfer fee of £20.
The warning comes just weeks after the Financial Services Authority, the chief City watchdog, announced that it would investigate the fees charged by lenders when borrowers cash in mortgages.
A spokesman for C&G defended the new fee, even though other lenders, such as Intelligent Finance, still charge nothing. "In setting rates and charges, we look at both elements together and how they contribute to the cost and competitiveness of our mortgage service overall."
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