Mortgage withdrawal fee introduced

People who apply for a mortgage with the Woolwich and then pull out part way through the process are to be charged a £150 fee.

The mortgage withdrawal fee has been introduced to make the charges for people who do not go ahead with deals fairer, and to protect the group from consumers who change their mind.

Until now, people who decided not to go ahead with the loan and had paid an up-front application fee of £995 lost all of their money. However, anyone who had opted to have the fee added to their mortgage did not have to pay anything if they later decided to pull out of the application process.

The new move means that anyone who has paid their full application fee up-front but then changes their mind will now be refunded the difference between the £995 and the £150 charge. Meanwhile, those who opt to have the fee added to their mortgage will have to supply Woolwich with debit or credit card details so that they can be charged if they pull out.

The Woolwich added that only those who decide not to take out a mortgage with the group, despite having been accepted, and those who have an application rejected because they have given false information will have to pay the fee.

People who are rejected for a mortgage by the Woolwich due to affordability concerns will not be liable for the charge.

The group, which is part of Barclays, said it had seen a lot of people going through the application process but then deciding not to go ahead with the loan because they had come across a better deal elsewhere.

A spokeswoman said: "It is a charge for people if they withdraw or their application falls through due to wrong information."