Can a lender charge a release mortgage fee?
A release mortgage fee is charged when a homeowner pays off the mortgage in full. It is charged by the lender to help defray the administrative costs of changing the information at the land registry office. It also covers legal and staff expenses for doing so. The mortgage release fee is not the same thing as being charged a penalty for paying off the mortgage early or switching to another mortgage company before the term has expired. Those charges are called early redemption penalties. The release mortgage fee may also be referred to as one of the following terms: • Deed release fee • Sealing fee • Final administration fee • Discharge fee • Final redemption fee Fees may be charged when a homeowner contacts the lender to find out how much is left owing on the mortgage. The mortgage holder will prepare a payoff letter with this information along with a fee for doing so. Another fee is charged for sending the letter to the homeowner by facsimile transmission.
