Can anybody help with working out fees?

oligeo

We need to re-mortgage and have the choice of 2 rates - They are both 2 year fixed for a £140k mortgage. One rate is 4.69% with a £999 fee, and the other is 4.89%, with a £499 fee.
Is it worth paying £500 more to get a 0.2% cheaper rate?

Thanks

opinions4u

Not precise but:

0.2% x £140k = £280 x 2 = £560.

The deals are virtually identical for your loan size.

Mr._Nice

Mortgage Genies TIIR (True Initial Interest Rate) calculator gives:
5.20% for the 4.89 deal
5.19%for the 4.69 deal
Which makes the two 4.69 deal a tad better by a rediculously small margin.
That was without filling in the exit fees, though that won't make any meaningful difference if both deals are from the same lender/have the same fee.
There are some subtleties to with whether the fees are up front or added to mortgage. Basically, if the fees are up front, then the 4.89% deal leaves you with more mortgage left to pay after the 2 years. If fees are added, then the 4.69% leaves you with more to pay off. Neither of that meaningfully affects the effective interest rate though.