buy to let mortgage fees

want2bmortgage3

I was just taking a look at the products on offer from woolwich, a 2 year fixed btl has a fee of £1999. What is this fee for, it is quite a lot isn't it?

Leon_W

Generally the lower the pay rate the higher the fee. If your only looking for a small mortgage then paying higher fees makes less sense than for a larger mortgage. The fee offsets the lower interest rate you pay in most cases.


Typically, for a BTL mortgage I don't really look at the initial rate, what's more important is the follow on rate unless you want to be remortgaging every couple of years paying more and more fees.


Woolwich also have a BBR + 3.19% lifetime tracker for £3999 ! That said, for the right client it might be the best deal.

want2bmortgage3

ok that makes sense , a fee for a lower rate. is that all it is then, either pay a lump sum 'fee' up front and have lower payments or dont pay a fee and get a higher rate. so its not actually a fee for them doing any work as such?

want2bmortgage3

I now see why consent to let is a good idea for 2 years before taking on a buy to let mortgage, higher fees and rates on these mortgages!!

somethingcorporate

The fee is the cost of the product. It doesn't actually have to represent any "work".

Factor these costs into your calculations, as already pointed out on small mortgage balances high fees become disproportionately costly and you'd be better getting a higher rate and overpaying.