HSBC Fee Free mortgage option

CarolinaChiquita

I am a first time buyer and know practically nothing about mortgages *though I am learning!!*

We have got one of these agreed in principle but I'm wondering what does that mean we get free? The interest rate is higher on the fee free mortgage and I'm wondering if it'd be cheaper in the long run to just pay everything up front now.

I know the surveyors are included in the freebies (well the basic one anyway) but what else is there?

We are making an appointment with the bank this week but I just wondered if any of you mse's knew in the meantime!

Thanks in advance!

Caroline

MortgageMamma

A simple way for you to do this is to take your monthly mortgage payment on the fee free deal and deduct the monthly mortgage payment on the with fee's deal and find the difference. Multiply that by the amount of months you will be tied into the deal. If its more than the total you are going to pay in fee's then the fee's deal is the better one for you. Generally, mortgages that are quite low benefit more from deals without fee's and a higher rate, and larger mortgages to fee's products. This is down to the proportion of fee to the size of the mortgage. Sorry if that sounds like twaddle its the only way I can put it in words!

MM

CarolinaChiquita

Thanks MortgageMamma - What kind of things do you tend to have to pay for though if you don't get the fee free option?

I know we'd have to pay for our survey but what else?

MortgageMamma

Application fee. survey fee, higher lending fee in some cases, telegraphic transfer fee.....they are the most common upfront fee's

Have you considered taking professional advice from someone who who has access to the whole of the mortgage market who will not charge you a fee? (known as a whole of market mortgage broker)

It is very likely there are much better mortgages available to you than what HSBC are offering.

MM

KTF

I agree with the above. Speak to a broker if you havent done so already.

CarolinaChiquita

We did yeah but it worked out that the one they recommended us (Northern Rock) worked out more expensive than the HSBC one.

I'll have to talk to the bank when we go this week before making any BIG!! decisions

Thanks for the advice xx

MortgageMamma

Don't let them credit check you until you have decided that its the mortgage you want, which NR product did you advisor recommend to you? Are you after a 100% mortgage? Theres a lot more competitive than NR at the moment!

CarolinaChiquita

Yes it was a 100% mortgage - it worked out as £x mortgage and £x loan - I can't remember the exact details my better half has it!

It's a 100% one with hsbc too - might have another look then to see what is out there.

Miss_Penny_Pincher_2

MortgageMamma wrote:

Generally, mortgages that are quite low benefit more from deals without fee's and a higher rate, and larger mortgages to fee's products. This is down to the proportion of fee to the size of the mortgage. Sorry if that sounds like twaddle its the only way I can put it in words!

MM

Thanks MM - I was wondering what is considered to generally be a low mortgage? Is a mortgage of £60,000 or less low?