Mortgage calculation advice for FTB..

GoonerByron

Hi,

FTB here, trying to get myself the best mortgage and I'm getting a bit confused with it all.. I think I'm understanding it correctly but what I'm coming to and what my mortgage advisor is telling me doesn't add up.. Could do with some clarification..

Trying to compare two mortgages, both 90% LTV. One has a rate of 3.29% fixed for 2 years with a fee of £345 and the other has a 2.69% rate with a fee of £1499. I'm being told that the one with the higher rate is better because of the large fee on the other one but I can't understand that by my sums.

If I add both fees to the mortgage amount, I will pay £919 a month on the first and £856 on the second. At the end of the 2 years fixed period I will have less outstanding on the first with a difference of £238. However, I would have been paying £63 a month more so would have paid £1512 more over the 2 years. Minus the difference left on the mortgage, I am working out that'll I'll be £1274 worse off on one with the higher rate/lower fee (Plus I would have been finding more each month towards the mortgage).

Does this make sense to anyone? Am I being a bit stupid and doing my calculations wrong?

If anyone could give me an idea that would be great.. Very confusing to a FTB!

getmore4less

add the fees, make the payment the same and see what is left.

http://www.whatsthecost.com/mortgage.aspx

mortgage size and term would help

guess £210k over 30 years

£210345 @ 3.29% paying £919 after 2 years £201866
£211499 @ 2.69% paying £919 after 2 years £200542

if my guess is close looks like you need to sack your advisor

Get them to put it in writing how much you will save along with the calculations.

amnblog

GoonerByron wrote: »

Hi,

FTB here, trying to get myself the best mortgage and I'm getting a bit confused with it all.. I think I'm understanding it correctly but what I'm coming to and what my mortgage advisor is telling me doesn't add up.. Could do with some clarification..

Trying to compare two mortgages, both 90% LTV. One has a rate of 3.29% fixed for 2 years with a fee of £345 and the other has a 2.69% rate with a fee of £1499. I'm being told that the one with the higher rate is better because of the large fee on the other one but I can't understand that by my sums.

If I add both fees to the mortgage amount, I will pay £919 a month on the first and £856 on the second. At the end of the 2 years fixed period I will have less outstanding on the first with a difference of £238. However, I would have been paying £63 a month more so would have paid £1512 more over the 2 years. Minus the difference left on the mortgage, I am working out that'll I'll be £1274 worse off on one with the higher rate/lower fee (Plus I would have been finding more each month towards the mortgage).

Does this make sense to anyone? Am I being a bit stupid and doing my calculations wrong?

If anyone could give me an idea that would be great.. Very confusing to a FTB!

Where have you got details of these two products from?

GoonerByron

amnblog wrote: »

Where have you got details of these two products from?

Hi,

The two products I believe are...

The 90% 2 year fixed product from Accord here

And this one from HSBC -

And to the person that asked, the mortgage amount is £209,700 and I am basing it over 30 years.

getmore4less

£210k figures above will be close enough

Get it in writing from your advisor how much you save by taking the high rate low fee option.