Mortgage fees

TheGame21

What are people's opinion's on mortgage fees? Are they worth paying or is it best to go with the non fee ones?

GMS

Totally depends on the figures.

dunstonh

High fees, low rates suit large borrowing and vice versa. A calculation needs to be done on your terms to see which is best.

macarena123

Agreed - however a general rule of thumb is that if you have a large mortgage you will generally recoup the fee (and more) through the lower interest payments. On a smaller mortgage you should probably look a low fee/no fee product, as the slightly higher interest payment may not amount to that much.

Are planning to go via a broker? If so they should be able to help you do the math and work out the overall costs for comparison

TheGame21

macarena123 wrote: »

Agreed - however a general rule of thumb is that if you have a large mortgage you will generally recoup the fee (and more) through the lower interest payments. On a smaller mortgage you should probably look a low fee/no fee product, as the slightly higher interest payment may not amount to that much.

Are planning to go via a broker? If so they should be able to help you do the math and work out the overall costs for comparison

Thanks, no we are doing it ourselves. Is the main issue to do the calculations within the fixed period as that is when you will see if you can recoup the fee? Because after that will just be the SVR anyway.

macarena123

It will be the SVR but they vary between offers - so you need to take that into account as well!

E.g (totally made up numbers but you get the gist). Assume a 25 year term (OK you will prob remortgage but ignore that for now!)

Mortgage A: Fee £1500, Initial 2 year rate 3.2%, then 23 years at SVR 3.9%

Mortgage B: Fee £300, Initial 2 year rate 3.8% then 23 years at SVR 4.2%

Plug your amount into a calculator and see what happens....