MSE NEWS: NatWest launches lowest 5-year fix as mortgage rates fall

efunc

I'm afraid much of this discussion of how the fee modulates the interest rate over the term has gone over my head. Am I right in thinking that it's all a moot point if you just choose to pay it upfront when taking the mortgage? Why would you roll it into the mortgage? (Unless of course you have to because of limited funds..)

harvey115

It is always good to add your fees to the mortgage amount, this is to avoid losing money in case the application is refused.

Its a silly point in thinking that you are paying so much interest for your fees, because the fees you have not paid form your existing money is still with you. So basically you add the fees to your deposit money instead of giving it to the bank as an extra. Same amount nothing lost just an added security in not losing the fees if the application goes under.

JimmyTheWig

efunc wrote: »

I'm afraid much of this discussion of how the fee modulates the interest rate over the term has gone over my head. Am I right in thinking that it's all a moot point if you just choose to pay it upfront when taking the mortgage? Why would you roll it into the mortgage? (Unless of course you have to because of limited funds..)

No, that makes no difference.

Basically the question is this.
Is it better to get a 3.0% mortgage and pay £2000 fees, or a 3.5% mortgage with no fees.
The answer to that will depend, mainly, on the amount of your mortgage.

If you don't understand my rule of thumb earlier then post the details of the mortgages you are considering and the amount of your mortgage and someone here can tell you which they think it best.

getmore4less

efunc wrote: »

I'm afraid much of this discussion of how the fee modulates the interest rate over the term has gone over my head. Am I right in thinking that it's all a moot point if you just choose to pay it upfront when taking the mortgage? Why would you roll it into the mortgage? (Unless of course you have to because of limited funds..)

It makes no difference, you either have the money or you don't, you add the fees or take the amount ofthe existing mortgage when doing the comparisons.

This pay your fees up fron it saves you money is all nonsense.

Dan2301

I'm a first time buyer, made an offer this am went not lcl natwest branch and got great service and a good rate, 10% deposit need. No more renting.

therightthingtodo_2

be careful with paying the up front fees on the Fixed rates deals, I did this 5 year fix with Natwest, I have a big mortgage so it made sense to get the lower rate over 5 years, but the vendor pulled out of the sale as they lost their job, and Natwest are still charging me £2495 and I get nothing, so I've lost my survey fees, legal costs and this on top.

Natwest's stance follows the premise that funds are booked, rate reserved and they've secured the money.

Meanwhile I hand over a lot of money, dust myself off and start again, they have offered to roll the offer onto another house in the next 3 months but there's better deals out there now!