High Product Fee!

Big-T_7

Hi all, just would like to pick some brains!

Just had a mortgage review from northern rock.

They are offering a fixed 4.96% for 18 months on a £130,000 over 25yrs.
However, product fee is £3922 (not inc £299 for additional borrowing and £295 review fee) which will all be added to mortgage so total to pay would be £135,000 ish.
Monthly repayments would be £746.60. There is also no early repayment charge.

My question is, as everyone wants to know does this sound ok before I do the deal or would it be better to get lower product fee but higher rate!


Why do they have to offer so much and make things so confusing!!:o :o

LisaT186

Sounds like a lot of fees on that level of mortgage! Do you mind being tied in or do you need a product with no redemption penalties?

If its important to have no penalty there is a product out there if the criteria fits at 5.85%, a 25 year repayment mortgage is £825.71 a month so £79.91 a month more. Over 18 months you would pay £1,434.78 more plus a £748 arrangement fee. No legal fees and no valuation fee. You would need to pay the deeds release fee from Northern Rock which I bleieve is £250. So this higher rate would overall cost approx £2,500 less.

If you are happy to be tied for a couple of year then there are lower rates than this with lower fees as well! Eg 5.14% with £999 fee monthly payment circa. £771 (little bit more if you add the fee).

Keep looking!

Stewboy1978

Am I reading that properly - £4000 fee for a fixed rate over 18 months? Ie after 18 months you will need to pay another arrangement fee?

If so, run...run like the wind!

Big-T_7

Gosh,

I am that confused I think I may do a Britney and I wont need any clippers!!:eek:

The thing is, we want to remortgage and borrow £30,000 on our £100,00 (hence £130,000 we want to borrow) to do up the house and sell it getting as much for it as possible and then go our separate ways, so we dont want to be tied in particularly as I dont fancy getting stung 3% for early repayment!

If this makes sense, does it still sound like a bum deal????

Rick62

This is not the right deal for you. The fee is very high for your size of mortgage and you will have Early Repayment Charges if you sell up (unless you could 'port' the mortgage to a new property, which does not sound like your plan).

You need to speak to a (fees free whole of market) broker, or you could lose out £thousands making the wrong choice.

LisaT186

Sounds like an even worse deal if you are going to sell within the 18 months! Nearly £5,000 to borrow an extra £30,000?!

Definitely go to a broker, you can do better without redemption penalties