Abbey has attracted fierce criticism from brokers following its decision to implement a £199 fee for customers who wish to switch to another product.
Abbey says the additional charge covers the administration costs of processing the mortgage for a second time.
"It is only payable if the application has been agreed and the survey already instructed," a spokesman says. "At the time a customer applies for a mortgage, funds are secured by Abbey and therefore reserved for them to complete.
"If they decide to change to a lower rate product, Abbey is still paying the higher rate."
But brokers say the move is "unhelpful". "This is just another excuse for charging money," Fahim Antoniades, director of Quantum Mortgages, says. "The idea the £199 is an admin charge does not wash. What does it cost to switch data on a system?"
David Hollingworth, mortgage specialist at L&C, says the fee will impact on the benefit to the customer in switching.
"Brokers will clearly factor this additional cost into whether it still makes sense to switch the rate," he says. "In the current climate, clients are unsure of what to commit to and the potential to incur a fee if a better rate is subsequently launched will not help in reaching a decision."
Hollingworth says it would be much better for customers and brokers if there was no switching fee, adding that Abbey still remained more flexible than Northern Rock - who will not allow any product switch after application.
"That said, it will be a shame to see more switching fees in an environment of rapid rate movement," he concludes.
Ray Boulger, senior technical manager at John Charcol, says he would prefer lenders not to charge fees to switch products, but understood their reasons for doing it.
Boulger comments: "There are a variety of stances in the market from lenders ranging from Northern Rock, to others that do not charge a fee.
"In the current market, with rates changing rapidly, it would benefit consumers to be able to change freely. I do not think the fee is unreasonable. However, I do not buy Abbey's excuse that the fee is to cover the extra admin costs as I does not take that much to switch over."IFAonline
Succeeding co-founder Simon Rogerson
Janus Henderson Global Dividend Index
More than 10 million shares allocated
Long-term strategic holding
What made financial headlines over the weekend?