MIG (Mortgage Indemnity Guarantee) or LTV charges have been charged for a number of years by mortgage lenders and have been the subject of much debate. This is because they provide no benefit to the borrower - the mortgage lender merely uses the money to purchase an insurance policy should the borrower default. It would be interesting to see if anyone has attempted to reclaim these unfair charges. I was charged £850 by The Cheshire Building Society back in 1997 and am considering writing to them.

Hi, Further to my original post here is a copy of the letter that I sent to The Chelsea. Basically I just cobbled the template letter and replaced bank charges/penalties with discharge fees. Hope this helps Chelsea Building Society Mr xxxxxxxxxxxxx Thirlestaine Hall xxxxxxxxxxxxxxxx Thirlestaine Road xxxx Cheltenham xxxx Gloucestershire xxxx GL53 7AL LETTER BEFORE ACTION 13 July 2006 Dear Sir/Madam, Mortgage account number: xxxxxxxx I am very disappointed that you have failed to respond to my letter of the 28th June 2006. I now understand that the regime of ‘fees’, which you have been applying to my account in relation to discharge fees, are unlawful at Common Law, Statute and recent Consumer regulations. I would draw your attention to the terms of the contract that you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner that complies with UK law. I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary. I calculate that you have taken £175. I require repayment in full of this money and if you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest plus my costs and without further notice. Yours faithfully, xxxxxxxx

I was charged a discharge fee of £175 by Chelsea Building Society when I remortgaged recently to a new lender. I wrote them a standard letter a few weeks ago but did not receive a reply. A LBA letter was sent last week and guess what - I received a cheque for £175 this morning!