mortgage fee moan

italia

i've remortgaged 4 times over the last 8 yrs, always managing (after alot of searching) to get a fee free, free legal fees, free valuation deal on a discount tracker. i.e costs me nothing, i think once it cost me £200 but that was all. Now I want to remortgage as my tracker is up to 5.93% (and it will probably go up again.

I know that as rates are expected to rise that the fixed deals are higher rates and have high fees, but even the discount variable rates have huge fees too. in fact i cant find one without one.

In most cases the interest I would save over the 2 year discount is LESS than the upfront arrangement fee. What is the point in that!

I thought I had found a good one on motleyfool, 4.99 fixed 2 yrs with a £395 fee it said completion fee n/a but i looked on the building society website and they want 2.5% of the loan amount! more than the interest i would save! pointless! i've come to realise most of the motley fool mortgage details are wrong when it comes to fees!

i've trawled all the usual sites, fool, charcoal, moneysupermarket and many many more and can't a discount tracker without huge fees. anyone got any suggestions?

current mortgage woolwich tracker at 5.93%, likely to go up. outstanding mortgage 108K on property work 165K. monthly payments 770, 20 yr term remaining.

andrewbrydon

Hi

To be honest the deal you have isnt too bad. With no or very little fee you are looking at best 5.75% so not a huge saving and with a fee to WOOL for moving i would wait till your deal expires then ask WOOL then look elsewhere

luckyfool

andrewbrydon wrote: »

Hi

To be honest the deal you have isnt too bad. With no or very little fee you are looking at best 5.75% so not a huge saving and with a fee to WOOL for moving i would wait till your deal expires then ask WOOL then look elsewhere

I don't think his Woolwich deal will expire, it looks like their term tracker product.

If that's the case then he is going to struggle to improve on that. A mortgage tracking base rate at 0.18% above with no setup fees or costs is pretty much market leading. If you want a significantly lower rate then you will have to pay fees. If you want a fee-free fixed rate you will either have to take a significantly higher rate up in the mid-high 6%'s or you will have to pay an arrangement fee. The wholesale cost of 2 yr fixed rate money is about 6.25% just now, on top of that on a remortgage deal lenders are paying for legal fees and valuation (let's say £300). Their profit margin has to come from somewhere, it will either be in fees to get a lower rate, or the rate will be higher to compensate for the lack of fees

Rick62

To be fair a 3% margin, with no fees, is pretty competitive (i.e. 0.18% over 5.75% is a 3% uplift). How many industries you know that work on a 3% gross margin. You can't expect the lenders to work at a loss.

MarkyMarkD

Italia

You've already switched to what is one of the very best long-term good value mortgage products. I'm not surprised that you can't save money on that deal by remortgaging. Surely you realised it was good value when you bought it?

The fact that the rate is likely to rise doesn't represent it getting worse value - it's a lifetime tracker. It just represents rates rising across all lenders. So you won't be likely to save money by remortgaging.

If a lender offers you a free valuation, no product fee, cashback or whatever, as well as paying your intermediary a procuration fee, that money has to come from somewhere. Either it's from charging a higher rate, or by assuming that you'll pay a higher rate after the discount/fix ends, or it's by making a loss.

Clearly you aren't going to pay a higher rate after a discount/fix ends, so any sensible lender isn't going to offer you a loss-making rate any more.

It is very debatable whether the Woolwich mortgage you have at the moment makes Woolwich/Barclays any money - my calculations would suggest not: Whilst Rick62's correct that the margin over BBR is 0.18%, the LIBOR based cost of funds to Woolwich is higher than BBR of 5.75% - indeed it's more like 6.04% for 3 month LIBOR which makes BBR+0.18% loss-making.