Should I add the completion fee to the mortgage?

stphnstevey

I have the choice of adding it to the mortgage or paying it now?

Also, does anyone know where that article is on whether to save or pay off the mortgage?

dunstonh

if you add it to the mortgage, you will pay interest on it for the length of the mortgage. A 25 year period would see you paying around 2.5-3 times the fee over that period.

jamesd

Add it to the mortgage if the after tax interest rate or return on your saving or investing the money instead is greater than the mortgage interest rate. The benefit for the typical comparatively small fee isn't very significant, though, just 65 over 25 years on 500 if the difference in interest rates is half a percent.

Same for overpaying on the mortgage. If you can get a higher return than the mortgage interest rate you pay it off sooner by doing that until you can pay off the remaining balance, instead of overpaying on the mortgage. Here the larger amounts can make a significant difference.

A risk in both cases is the savings or investments removing your eligibility for some benefits if you become unemployed or too sick to work.

apk1

I always recommend people to add the fee to the mortgage, that way if for any reason the mortgage does not complete they do not pay, if they wish to make a capital repayment equivilant to the fee later they can.