With or without fees?

SirGonGon

Ok so my 2 year fix term is up.

I have been told there is a good chance rates are going to be back on the rise after January so not to hang around on the 4% svr.

I am with Natwest and with my 85% ltv have been offered 4 options.

2 Year Fix 4.29% at £548.99/month with £995 fee
2 Year Fix 4.69% at £573.84/month with no fee.

5 Year Fix 4.89% at £586.48/month with £995 fee
5 Year Fix 5.09% at £599.26/month with no fee.

Now I think I would prefer the security of the 5 year deal?

However I dont no what is the better move regarding putting an extra grand into my mortgage or not?

Any help or pointers would be appreciated.

new_home_owner_3

SirGonGon wrote: »

Ok so my 2 year fix term is up.

I have been told there is a good chance rates are going to be back on the rise after January so not to hang around on the 4% svr.

I am with Natwest and with my 85% ltv have been offered 4 options.

2 Year Fix 4.29% at £548.99/month with £995 fee
2 Year Fix 4.69% at £573.84/month with no fee.

5 Year Fix 4.89% at £586.48/month with £995 fee
5 Year Fix 5.09% at £599.26/month with no fee.

Now I think I would prefer the security of the 5 year deal?

However I dont no what is the better move regarding putting an extra grand into my mortgage or not?

Any help or pointers would be appreciated.

go no fee on both, you will save 400 pound on the 2 year and you will save 155 pound on the 5 year.

to work it out divide the fee between 24(2 years) and 60 months (5 years) then add it to the amount with the fee and both amounts are more than without.

SirGonGon

Thanks mate,

Think I will just plump for the 5 year fee free in that case.

getmore4less

I do wish people would use one of the correct algorithms.


1. 5 Year Fix 4.89% at £586.48/month with £995 fee
2. 5 Year Fix 5.09% at £599.26/month with no fee.


One correct way to do it is add the fee, make the payments the same and see how much is left after 5 years

But as you don't give the amount owing it will be a guess.


For £100k @ 600pm roughly 23years(a guess 25-2)
1. £88215
2. £88014


Paying £600pm the break even amount of mortgage is around £116k

so over £116k pay the fee lower rate, under take the higher rate
(accurate calculation needed if close)


(note term is not relevant for determining the breakeven amount owing)

SirGonGon

Thanks for the reply mate,

Unfortunately I am not great with this stuff, and I am still trying to piece your answer together there... with little success I may add.

I have left £106,768.63 with 27y 9 months left.

Thanks again.

suze012

Do you need to go with Nat West? Ive seen better rates 5 year fixed fee free cheaper than what you've quoted

SirGonGon

I don't have to. Though my income has taken a dent due to a new job since I took the mortgage out.

I fear this would hinder my chances of a remo elsewhere?

getmore4less

SirGonGon wrote: »

Thanks for the reply mate,

Unfortunately I am not great with this stuff, and I am still trying to piece your answer together there... with little success I may add.

I have left £106,768.63 with 27y 9 months left.

Thanks again.

Fee free
£106768.63 after 5 years paying £599
1. £96,922
2. £96,808

if you stuck with the 4% and rates did not climb after 5%
£90,651


I just stick numbers into a simple calculator
http://www.whatsthecost.com/mortgage.aspx.
they get close enough.

once you know your payment you just use interest only with that amount.

it is important for comparisons that you account for the same cash with both mortgages. so you have to add fees and make the payments the same or account for the differences in other ways.

SirGonGon

Thanks for that, the calculator has made it a bit clearer to me now.