Mortgages. Exit Fees To Be Capped.
Interest Only Mortgages FSA Makes Move To Protect Homeowners
In the last 3 to 5 years we have seen rises of up to 450% in the exit fees charged by lenders when borrowers redeem their mortgage. But at last the Financial Services Authority (FSA) ha seen the light and is going to crackdown on these increases.
Lenders have been telling new borrowers about the exit fees currently charged, but the lender has retained the right to increase those charges at any time and without advising borrowers. This amounts to a free hand to increase the…
Abbey recently stated that over 25% of homeowners decide to take out an interest-only mortgage. It’s not hard to see why � the monthly payments are significantly less, just look at this example based on a 25 year �125,000 mortgage at 5%. The interest only mortgage will cost �525 per month – but the repayment mortgage is �735 per month � an additional �210 a month � that’s a lot of money!
At the root of the issue are the first time buyers � they simply can’t afford the rep…