FTB please help me quickly with my maths

backhouse21

Hi,

Can someone help me with my maths? Which one is better financially, or are they exactly the same?

2yrs fixed at 5.19% with £995 fee

OR

2yrs fixed at 5.59% with no fee

?

Thanks in advance!

backhouse21

If it helps, the mortgage size is £118,750

CAN1976

118750 * 0.0559 = 6638.125, so for 2 years 13276.25
* 0.0519 = 6163.125, so for 2 years 12326.25

diff = 950

kingstreet

That would depend on the total interest & fee costs over the period of the rate and the amount outstanding on the mortgage at the end of the same period.

For example;-

£118,750 x 5.19% x 2 = £12,326 + £995 = £13,321

or

£118,750 x 5.59% x 2 = £13,276.

If these are for the same lender, with the same end of year two capital balance, the option with the fee is cheaper by £55. However, if you add the fee to the loan, it will end up costing you more overall.

backhouse21

wow, thanks a lot for the swift response!

they are indeed from the same lender with the same end of year two capital balance.

thanks very much!

CAN1976

option with fee is dearer by £45....

backhouse21

ok, conflicting answers lol now i'm confused

kingstreet

Yeah, the other way round and by £45 not £55.

I got the maths right, but read the answers wrong!

kingstreet

I had a TIA last year and some days I do have problems with reading figures the wrong way round.

The actual calculations are correct, thanks to CAN who had also done them, but I'd mis-read the answers.

Apologies.

backhouse21

no problem, thank you ever so much for your help! greatly appreciated.

amnblog

It makes very little difference mathematically but have you passed credit score with Halifax on this Help to Buy product yet.