Fees or Fee free? Calculations?

Flash_G_2

We are looking to re-mortgage fairly soon as our fixed rate runs out at the end of May. (We don't want to go on to the SVR as its ridiculously high, in excess of 5% (Dunfermline Building Society))

We are very likely to be going for a fixed rate for 5 years with a term of 17 years.

We have no issues with credit, jobs or affordability etc and will have approx 55% LTV, I would estimate house value £230k and mortgage approx £125k depending on fees.

My question is, what interest rate do you need to achieve in order for it to be cheaper to get a fee free mortgage?

eg. Popular mortgage at present is the co-op 2.79% 5 year fixed £999 fee and then valuation and solicitor costs on top?

I estimate valuation around £300 and solicitor fees around £600 (We live in Scotland and I might be a bit out on this?).

So approx a total £2k of fees to add on to the mortgage (total after fees £127k).

How do you work out what % fee free mortgage I would need get to be better off than paying the £2k fees?

I hope this makes sense.

Thanks.

latecomer

There are no valuation or standard legal fees on the Co-op product.

If you want to run the numbers use the mortgage calculator here:

http://www.moneysavingexpert.com/mortgages/compare-fixed-rate-mortgages

You can compare 2 fixed rates easily. If you are sure about the LTV then the Co-op is almost certainly the cheapest on the market currently for you (it was for us and we're borrowing less)

Thrugelmir

Flash_G wrote: »

We are looking to re-mortgage fairly soon as our fixed rate runs out at the end of May. (We don't want to go on to the SVR as its ridiculously high, in excess of 5% (Dunfermline Building Society))

Co-op has a follow on SVR of 4.74%.

Flash_G_2

latecomer wrote: »

There are no valuation or standard legal fees on the Co-op product.

If you want to run the numbers use the mortgage calculator here:

http://www.moneysavingexpert.com/mortgages/compare-fixed-rate-mortgages

You can compare 2 fixed rates easily. If you are sure about the LTV then the Co-op is almost certainly the cheapest on the market currently for you (it was for us and we're borrowing less)

I must have misread the co-op deal, I didn't realise there were no valuation and legal fees.

I was being fairly conservative with the valuation of our house, we definitely are in the 60% LTV mortgage bracket.

I will have a look at that calculator, thank you.

Flash_G_2

Thrugelmir wrote: »

Co-op has a follow on SVR of 4.74%.

Dunfermline SVR is 5.19%, with a 60% LTV we would be crazy to go on to the SVR in these times.

Thrugelmir

Flash_G wrote: »

Dunfermline SVR is 5.19%, with a 60% LTV we would be crazy to go on to the SVR in these times.

I agree. Though take into the account the lender you are switching too. SVR's have been edging upwards and will continue to do so. .

Flash_G_2

Thrugelmir wrote: »

I agree. Though take into the account the lender you are switching too. SVR's have been edging upwards and will continue to do so. .

Why would I need to consider the SVR when switching lenders? I thought they could change them to whatever they want anyway?

So a company with a low SVR today could have a high SVR in 5 years time?

getmore4less

The easy way to work out the best deal

Use a simple calculator that shows outstanding a monthly basis

Add the fees
Set the monthly payment the same
See what's left after 5 years(or any other term you chose).

Thrugelmir

Flash_G wrote: »

Why would I need to consider the SVR when switching lenders?

As your mortgage balance reduces the economics of switching lenders diminish.

Also lenders reverse their better rates for those borrowing more.

There's no guarantee that fee free packages will be around in the future either.

Zero_Sum

I've got a spreadsheet which does that sort of thing
http://zerosum.host56.com/

Flash_G_2

Zero_Sum wrote: »

I've got a spreadsheet which does that sort of thing
http://zerosum.host56.com/

Nice spreadsheet thanks