Money, fees and interest
Auditing your account: what is principal, what is interest, what is a fee
Start with the transaction history and split every line into categories. Most fee disputes become obvious once the account is broken up properly.
What this problem looks like
- The balance has grown and you cannot account for the difference.
- Charges appear on statements with descriptions like 'admin fee' or 'legal costs' and no detail.
- You are being charged interest and you cannot tell whether it is on the loan, on arrears, or on fees.
What you are trying to establish
- The full transaction history for the account, from the start of the period in dispute.
- A split of every entry into: principal, contractual mortgage interest, arrears balance, monthly arrears fees, field-agent charges, legal fees, receiver fees, and any 'additional interest'.
- For each fee: the tariff provision relied on, the version of the tariff in force on that date, and whether the amount matches it.
- Whether interest has been applied to fees, at what rate and on what stated basis.
Evidence to collect
- Annual statements and arrears statements. MCOB 13.5 requires regular arrears statements showing payments due, the shortfall, charges and the total debt, and identifies legal fees and interest as arrears-related charges.
- The transaction history in full, not a summary.
- The tariff of charges in force at each relevant date.
- Invoices or fee notes behind third-party costs, which are usually the last thing to be provided.
- A one-page spreadsheet of your own: date, description, amount, category, tariff provision, queried yes/no.
What to ask for
- An itemised breakdown of every fee, charge and cost, with date, amount, description and the tariff provision or contractual clause relied on.
- The version of the tariff in force on the date each fee was applied.
- Copies of invoices or fee notes for every third-party cost passed to the account.
- Confirmation of whether interest has been charged on fees, the rate and the basis.
- The transaction history covering the whole period in dispute.
What a useful answer looks like
- A line-by-line list that reconciles to the balance, with a contractual source for each charge type.
- Invoices for third-party costs, or a clear statement that a cost was not a third-party cost at all.
What an inadequate answer looks like
- A list of amounts with no dates, no descriptions and no tariff reference.
- 'Charges are applied in accordance with your mortgage conditions', without saying which condition.
- Third-party costs asserted but no invoice, and no explanation of whether the cost was actually incurred.
Next escalation
- Complain in writing, attaching your categorised schedule, and ask for a final response.
- Refer to the Financial Ombudsman. The Ombudsman's published approach to mortgage fee complaints normally involves considering the transaction history, the relevant tariffs, and evidence of legal fees where legal fees have been charged — so put all three in front of it.
Example letters for this stage
- Request for an itemised breakdown of fees and legal costs — Used where charges have appeared on a statement without an explanation of what they are for.
- Request for the invoice or fee note behind a charged cost — A short follow-up where the breakdown was given but the underlying invoice was not.
Official sources
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This is information, not legal advice
Nothing here is legal advice and no professional relationship arises from reading it. Time limits apply to complaints and to court steps. Free help is available from Citizens Advice, StepChange and Shelter.