Lenders without heavy 'product fees'..?

Charlton_King

I may be looking to remortgage away from my current lender next time round. I'm wondering whether any established lenders are in the market with both reasonable rates AND no hefty product charges.

Thrugelmir

Much depends on your requirements.

Products are pitched to attract certain types of customer.

kingstreet

It's a question of using the mortgage amount and the term of the deal to establish the best route - low rate/high fee, high rate/low fee or middle of the road.

The best rate is going to suit the bigger mortgage amount and the fee then means less as the interest saving is higher. The converse applies to smaller mortgages.

Jimbo1976

Most lenders have pretty wide product ranges. There will be some products with no fees, some with average fees and some with large fees. Typically the higher the fee, the lower the rate. You won't find a very low rate with no fees at all.

You should do your research to work out what is best for you. Normally with smaller mortgages it is better to take a low fee rate as the interest rate savings are negligble. With big mortgages is it usually best to take the lowest rate and pay a big fee.

Charlton_King

Ok, thanks to all.

Clearly the message is: they get you, no matter what...

Thrugelmir

Charlton_King wrote: »

Clearly the message is: they get you, no matter what...

Customers aren't uniform either.

High equity/ low equity

Squeaky clean credit/ adverse credit

High Balance / Low Balance

etc etc

Many permutations.

GMS

Charlton_King wrote: »

Ok, thanks to all.

Clearly the message is: they get you, no matter what...

Get you? It's a commercial transaction. Profits will be made obviously.

You asked for reasonable rates and no hefty product charges. Without debating what is reasonable and hefty do you mean a 'cake and eat it' mortgage?

Low rate usually means higher fees. Key is to find a happy medium. Is an ok fee with an ok rate better than a low rate with a high fee, or is it better with a higher rate and no fees? All depends on the numbers.

bigadaj

Interesting definition of 'get you'!

Assuming you qualify for a reasonable mortgage, ie haven't failed to pay back debt historically and have some deposit or equity then mortgage rates are ridiculously low. Lenders make profits but margins on mortgage business are typically low, your future bargain mortgage will be being subsided by savers and tax payers through funding for lending.

kingstreet

It's all about the marketing budget a lender wants to use to attract new business.

Lets imagine at one particular business level, say 75% loan to value, the lender wants to spend £1,000 to get your business.

If it put the whole £1,000 into not charging a fee, one of its competitors might use half to reduce the fee and half to reduce the possible rate.

So, you'll often find a lender will have three offers;-

product A - no fee, medium/higher rate

product B - half fee, half rate

product C - high fee, lower rate.

By doing this, the products can be made attractive to different borrowers with the lender offering the same £1,000 to each one in different ways.

It's juts the same as Tesco selling beans with 10p off a tin, or 3 for 2. Chances are once you cost out the cost of buying the stock, the margin for the retailer is exactly the same.