Product Fees

creditcarddebt

Hi, I am just wondering whether adding the product fee to the mortgage when its time to remortgage will come under the new MMR rules to check for affordability. We have the option to switch products online, so its a choice of going for one of the following:

2 year fixed 2.55% product fee £995
2 year fixed 3.39% product fee £0
5 year fixed 3.65% product fee £995
5 year fixed 3.99% product fee £0

I think we will go for the 5 year fixed as rates are going to go up, and if we went for the 2 year fixed then chances are we might not get a fixed deal for 3.99% when its time to remortgage.

We have to stick with our mortgage provider as we are both self employed and unfortunately my husbands income has reduced since we took out the mortgage as one of his main sources of work went bankrupt!

I know people will say we should have the £995 in savings to pay for the product fee but we don't. So do we run the risk of being turned down for the fixed deal if we add the product fee to the mortgage or do we just go for the fixed deal without the product fee?

Any feedback would be appreciated.

kingstreet

creditcarddebt wrote: »

adding the product fee to the mortgage when its time to remortgage will come under the new MMR rules to check for affordability

Yep. TBH with most lenders it already did.

When they quote maximum loan, that included any added fees.

RavingMad

I recently did an online product switch with the HSBC and initially I chose to add the fee to my mortgage. It all went through and was just waiting for my wife to log on and accept the offer.

By the time we got round to registering an online account for my wife, I chose a different product with no fee.

Had I not changed my mind, I still think it would have gone through without an issue.