Mortgage - Arrangement Fees

EmmS_2

Hi,

I have been with Chelsea as part of a two year fixed rate mortgage. I have looked at new options now I have come to the end of my agreement and they are offering 5.05 5 yrs fixed rate IO, with an arrangement fee of approx. £300.

Can they not waiver the Arrangement Fee or has anyone negotiated this before? If I am already a customer with them, then what are the reason's for having to pay again?

Looking at other offers on the market, the post office offers a cheaper rate but a more expensive arrangement fee at approx. £700.

opinions4u

EmmS wrote: »

I have been with Chelsea as part of a two year fixed rate mortgage. I have looked at new options now I have come to the end of my agreement and they are offering 5.05 5 yrs fixed rate IO, with an arrangement fee of approx. £300.

Can they not waiver the Arrangement Fee or has anyone negotiated this before?

You can ask the question. I would expect a negative response though.

If I am already a customer with them, then what are the reason's for having to pay again?

You presumably have a no fee option of staying on the standard variable rate. The fee is basically part of the cost of lending you the money. If they didn't charge the fee, they would charge a higher rate of interest. If they charged a higher fee they could apply a lower rate of interest. It's all swings and roundabouts. Ultimately you will have to pay the price quoted - just as you would if you were buying something in M&S or Next.

Looking at other offers on the market, the post office offers a cheaper rate but a more expensive arrangement fee at approx. £700.

Which basically supports my comment above - higher fee/lower rate.

dimbo61

use "whatsthecost " to see if its worth paying the bigger fee and cheaper rate with the post office
Check what you will owe at the end of the 5 years !!! with both deals !!
How much your mortgage is will decide if its worth paying the fee !