Commercial Mortgage Fees

mikehzzzz

I have just organised a £150 business loan with Nat West via first commercial loans.
We have been offered a rate of 1.25% above base rate which we were very pleased with. However, the Broker fee was £1500 (1%) of the loan. Nat West are charging a 2% arrangement fee of £3000 plus other admin fees of £470 and the bank insisted on a property and business valuation which cost £900. Making total fees of nearly £6000. From the time you have signed the application with FCL you are locked in and it quickly becomes apparent that you have spent money you will lose if you pull out.

The bank manager reckons that if I had approached the bank independently the best rate they would have offered is 2.5% above base or more and that I would still have had to pay the same in fees.
I no longer know if I have got a good deal or not?? What do you reckon?

mikehzzzz

Oops! My posting should have said the loan was for £150,000

JoeK_3

Hi Mike, It sounds like you did not shop around and compare different deals and arrangement fees.

Is it to late to withdraw?

Commercial mortgages are competetive just as domestic ones and you need to have a good look around.

JoeK

Rick62

Its actually not that bad. The 1.25% over rate is very good. The valuation cannot be avoided. The bank arrangement fee of 2% is a little high, but is made up with the good rate. The broker fee is the main charge that you could have avoided, the broker will also get about 1% from the lender, so you could have found a fees free broker.

toonfish

fee free commercial brokers are much harder to find, and I would say overall the cost is reasonable as you have secured the borrowing at a very good rate.