Any Morgage deals which cover yr costs?

cardiff_boy_2

Hi,

We have a fixed rate with NR. This is up in 2 yrs.
If we want to take out a new FR with them (And take advantage of lower interest rates, which reduces our mthly payments) we will have the costs associated with closing the original morgage early.

Has anyone had experence of other morgage comnpanys covering your costs in order to gain your buiness in switching morgages to them?

Any feedback if this is at all possible these days.

Many thanks.

kingstreet

What, the final, or deeds release fee?

No. Lenders don't pay specific fees for you. They may cover your legal and valuation costs, but on the whole, the saving you make on the rate is supposed to compensate you for the closing costs of your existing mortgage.

Why do you have to pay the final fee, if you are not leaving your current lender?

cardiff_boy_2

Hi Kingstreet,

Thanks for the reply.
Its the penalty charge for closing the fixed term early. If we did a new FR morgage now we would save a £100 a month. But if you add on the costs to the morgage, then it makes no sense.
Even though we have looked at taking out another 5 year fixed rate with NR, we would still have to pay a penalty fee of £4.9K on the original FR morgage.

GMS

cardiff_boy wrote: »

Hi Kingstreet,

Thanks for the reply.
Its the penalty charge for closing the fixed term early. If we did a new FR morgage now we would save a £100 a month. But if you add on the costs to the morgage, then it makes no sense.
Even though we have looked at taking out another 5 year fixed rate with NR, we would still have to pay a penalty fee of £4.9K on the original FR morgage.

You chose a fixed rate and the terms and conditions contained within the deal. You have got what you asked for, security of payments. Had rates gone up to 20% would you have allowed NR to take you on to a new fixed rate deal costing you more? Of course not.

If you want to leave the deal you will have to pay the agreed penalty

kingstreet

Sorry. I didn't read your OP particularly well.

You are talking about an early repayment penalty, not a final fee.

The same applies, as GMS has said. A lender is not going to give you a £4,500 "golden hello" I'm afraid.

You simply have to weigh up if you will be better off paying the penalty and getting a better rate, either with your existing lender, or a new one.

FWIW the penalty is money payable to the party which provided the funds for the fixed period, what we call a "market counterparty" for ending their agreement early. Incidentally, they do not have the right to end the agreement early if rates rose dramatically, leaving you paying well under the market rate at the time.

cardiff_boy_2

Thanks all for the reply.
Yep, no probs at all with the penalty for ending early, this is all part of the deal.

It was to get an insight into, is it normal these days for companies to cover any associated costs in order to secure your long term business. But this doesnt seem to be the case, and saves me the time in searching around.
So thanks again for taking the time on this for me.

Cheers

kingstreet

Aye. Lenders offer a product on a take it or leave it basis. They aren't going to put £4,500 into getting your business when there are plenty of takers where they don't need to.

Like I said, they do put money into legal costs and waived valuation fees and some products have no arrangement fee payable.

TBH on a shortish fix, they probably don't make that much profit. They'd have to tie you in for several years on SVR afterwards.