Er, . . yes, and . . . er, no.
Mortgage exit fees (a.k.a mortgage redemption fees) theoretically cover the cost of such things as contacting the Land Registry to remove the charge against your property. It's likely that there was something written into your original mortgage agreement which allows your lender to make such a charge. However many lenders seem to be making excessive (or unnecessary) charges. For advice on reclaiming all or some of the fee, see here:
http://www.moneysavin...reclaim/mortgage-fees
It's also possible that your lender might have made an error. When I paid off my mortgage, I got a quote for the amount that would be needed, and the date that I had to pay that exact amount. I got a banker's draft from the Abbey National and took it a few yards down the road to the Woolwich. They asked whether, as I'd now paid the mortgage off, I'd like them to store the deeds for me, but I said that I'd rather that they sent them to me. I waited several months before I heard anything from the Woolwich. Instead of sending the deeds, they sent me a notice of repossession, because I'd not been making any mortgage repayments! (They'd managed to lose my payment of over £30,000!!!). When I eventually got them to accept that I'd paid the mortgage off, they then tried to charge me over £200 interest for the period when I'd actually given them the money until when their system accepted that I had! I managed to get that wiped out, I got the deeds and I thought that everything was OK. Ten years later I tried to sell a small part of my garden to my neighbour, only to find that the Woolwich had failed to lift the charge against my property!
Chris