Is this a good mortgage offer?

SuperBOB

Bank of Scotland have offered us a joint mortgage on a £128,000 property. We are putting down a £32,000 deposit, so the mortgage will be £96,000.

The offer is:
2 Year Fixed @ 3.59%, £995 product fee. 10% overpayment's allowed per year at no penalty.

I seem to be getting similar rates to people putting down a far smaller deposit, but cannot find a significantly better deal elsewhere. I haven't so far enlisted the help of a broker, but perhaps I should?

Thanks for any advice

Crashandburn

3.39% Yorkshire on the basis income/credit score okay. Free Valuation and £495 fee

Thrugelmir

Are you adding the mortgage product fee to your mortgage?

SuperBOB

Thrugelmir wrote: »

Are you adding the mortgage product fee to your mortgage?

Yeah, but the figures above don't account for that - oops. Thanks for pointing that out. We will just add 25% of the product fee to the deposit.

SuperBOB

Crashandburn wrote: »

3.39% Yorkshire on the basis income/credit score okay. Free Valuation and £495 fee

Wow - actually it looks like a £95 fee?
http://www.ybs.co.uk/mortgages/current_products/products/2yr_fix_06.html

Might have to give them a call.

dimbo61

Right the 2 year fix is 3.49% fee £95 but they also do a 3 year fix at 3.99% and even better a 5 year fix at 4.19% fee £1495 or 4.49% fee £95
You need to work out which is the best deal for you ( use "whatsthecost" to pick the best 5 year deal for your size of mortgage)
Why 2 years? will you have the money to clear the mortgage in 2 years NO
Do you like paying fees to remortgage every 2 years ? Are you planning on moving up the housing ladder !
PS YBS are a great lender and I love the offset mortgage flexability but thats only my opinion

Thrugelmir

SuperBOB wrote: »

Yeah, but the figures above don't account for that - oops. Thanks for pointing that out. We will just add 25% of the product fee to the deposit.

I noted you were borderline at a 75% LTV. This could make a difference to the rates offered.

SuperBOB

Thrugelmir wrote: »

I noted you were borderline at a 75% LTV. This could make a difference to the rates offered.

Aye Cheers. We are borderline by choice and will put in 25% of whatever the final cost ends up being, to get the better rate.

Niksan

I hate high product fees, especially for short term deals as they make it look like you're getting a better deal by having a low APR, when in fact depending on repayments it could translate to more than double the APR.

Thrugelmir

Niksan wrote: »

I hate high product fees, especially for short term deals as they make it look like you're getting a better deal by having a low APR, when in fact depending on repayments it could translate to more than double the APR.

High product fees are in part to discourage low balance remortgaging. Lenders prefer fewer customers with higher balances. So more profit as the likelihood is that the mortgage still has some years to run.