Alliance & Leicester has fixed its redemption fees at £295 so that borrowers know in advance what it will cost to redeem their mortgages when they first apply for a loan.

Spokesperson for Alliance & Leicester Sally Lauders says " This move offers borrowers more transparency and and will be detailed on their Key Facts Illustrations. It allows people to weigh up all the options and make a choice based on rate and all fees."

Terry Pritchard CEO of the Chase Mortgage Group, winner of Mortgage SubPrime Packager of the Year 2005 says that "With luck other Lenders will follow suit, leading to a more regulated exit fee from lenders".