Booking fee - transfering existing mortgage within same company?

NickiRC

We've been FD mortgage holders for >10y. Current house owned for nearly 6 years. Existing FD offset 2y fixed rate reverts to variable in January. Want to move to a new offset within FD to save on the interest. This is possible and will save us money in the long run - but - I can't understand how £1450 booking fee is reasonable (our details and the house haven't changed)

Given bank charges issues is there any way of (successfully) querying booking fee for existing customers as a reasonable charge? (we could opt for the higher interest no booking fee option - but total is more)

Many thanks in advance

kingstreet

It's not designed to represent cost to the lender.

The fee and the rate are the combined cost of the swap the lender has had to arrange to be able to offer the product.

Lenders tend to offer the lowest rates with the highest fees, the highest rates with the lowest/no fees.

You don't get to win on the swings and the roundabouts.

ACG

The bank needs to earn a profit, to do that they use a combination of fees and rates. If they removed that fee, the rate would be higher.

Thats why it is important to not get sicked in by the headline rates, but rather the overall cost. A lot of the time (especially where I am) it works out cheaper to take out a higher fee with no or low fees.

In short, they have a product. You have a choice to take it or leave it.

Spangled

In general, high-fee / lower-rate deals are worth it if your mortgage is large (say, £200k). But if your mortgage is small (say, £70k) then fee-free / higher-rate deals are generally better. A high fee on, say, a two-year fixed mortgage of £70k adds proportionally more to the overall cost.

If you post your outstanding balance, remaining term, and mortgage rates for fee and no-fee options, there are a few posters on here who can help you crunch the numbers and compare the costs.

upoiupou

Previously, I was able to get my building society (Skipton) to waive the arrangement fee on two occasions when I changed mortgage product with them.

If you're staying with the same lender, surely they save on marketing, processing, checking and other staff time costs because you're already their customer, they've already looked into your property and the amount of work they have to do is reduced. Also, their risk is reduced if they know you've been a good payer for 6 years (compared to, say, a first time buyer with no mortgage history).

I think there's a benefit to the lender, and that should be reflected by at least a reduction in the fee you pay. Have you tried negotiating with them?

amnblog

A lender offering a particular deal to a customer based on some arbitrary negotiation whilst charging another the full fee would have fun explaining the process to the regulator.

The fees are what they are. If you don't like them and can get better elsewhere, you are free to do so.