Accord mortgage arrangement fee

CHokKA_3

Hello everyone

My fiancee and I are in the middle of sorting out a mortgage for a house that we have made an offer on. We have been speaking with a few brokers and we have been offered a mortgage with Accord. I know from reading around here that they are a reputable lender, so we're happy with that. It has a very good rate and the repayments are also quite attractive, but we have been told that the arrangement fee is just over £1900 to be tied in to a two year deal. This will be added onto the mortgage so we're not paying for it upfront. Now I am no expert on mortgages but to me this is rather high, especially as it is being added onto the mortgage and interest will also be applied to it. We have been told that once the deal is done, we'll get £250 cashback, and also the valuation is included within that price (so roughly £400-odd out of that?). What I want to ask the experts at MSE is whether or not this is fairly normal practice now? We have an option of going with Santander for a little more per month (about £60 per month more) with no arrangement fee, but lower payments are obviously preferred. I don't mind paying the arrangement fee if it is necessary to secure the best deal, but like I say, I'm no expert on mortgages and would like to know the general consensus on this type of deal.

Many thanks folks

_Andy_

If you're paying a fee of that amount you may as well take something longer than a 2-year deal

CHokKA_3

Hi _Andy_

Thanks for the reply. That's what we have been thinking, but I just wanted to find out whether the added extras in the cost would be more beneficial to us. Like I said, we can get a 3-year term for no arrangement fee with Santander. I might look into that one a little further.

Any other thoughts on my original post?

dunstonh

Like I said, we can get a 3-year term for no arrangement fee with Santander. I might look into that one a little further.

You said that was currently £60pm more. 60x24 = £1440. Accord is £1900 minus £250cashback.which is £1650. So thats a £210 difference. What are the other fee differences?

Is the 2 year deal with Accord fixed or discount or whatever? How does that compare to sandander?

ginvzt

Don't forget the interest you will pay on £1900 over the life of the mortgage!

bsk198

My partner and I are in a similar situation, currently sorting out a mortgage to buy somewhere together, but have decided to proceed with a 2 year Santander tracker instead of Accord. Yes the monthly payments are slightly higher (about £60) but Santanders current SVR is 4.24% as opposed to Accord's 5.99%. We have an 85% LTV and if house prices drop over the next two years I am concerned that we might not be able to re-mortgage elsewhere if for instance our LTV increased to 90% and we would then be left paying an excessive SVR.

VIGILANT22

and you're taking a 2yr!????!!!!

bsk198

Yep - the arrangement fee with Abbey is also only £995 with £250 back on completion. For the amount we're borrowing the 1.75% difference in SVR would equate to £238 extra payment per month. Yes I know that the SVR's might not be that far apart in two years and who knows we might be able to re-mortgage easily but for me I'd rather have the peace of mind and pay a little extra each month now.

dimbo61

So why not have peace of mind for 5 years if you plan on staying in your home at least that length of time ?
A 5 year fix means you will have paid at least some of the mortgage off when you could to remortgage ( provided you have not taken a 35 year term).
You will have long term security for the next 5 years ( planning a family any time soon ?)