Adding Product Fee to Mortgage

copperclock

Hello. I have a possibly silly question:

If I do a product switch with my current mortgage provider (Nationwide) I understand that I won't need to undertake any credit/affordability checks. But if I add a product fee (£1000) to the mortgage would that mean that they would do new affordability checks because I am borrowing more? I'd like to do the process online.

I understand that adding the fee to the mortgage is more costly than paying it upfront.

ACG

Good question (one I have not seen before)!
As the fee is part of the product I doubt you will need to do any new credit checks.

copperclock

Thanks ACG. Glad I am not being silly. I'll report back when I go through the switch!

garyhemming

A mortgage lender wouldn’t usually undertake new affordability checks on the back of the product fee alone. Hope that helps.

copperclock

garyhemming wrote: »

A mortgage lender wouldn’t usually undertake new affordability checks on the back of the product fee alone. Hope that helps.

Thank you. Yes, that very much helps.

Thrugelmir

Do the numbers stack up if you are borrowing the product fee?

copperclock

Thrugelmir wrote: »

Do the numbers stack up if you are borrowing the product fee?

I've no idea, to be honest. I just don't want to go through the hassle of a new mortgage application. I'm poised with my fingers on the keyboard ready to lock in a new product the second I am able to (which is 1st December so sadly not before BoE meeting on Thursday).

kingstreet

Current mortgage products are already reflecting a rate rise in November so doing this on 1 December will probably make little/no difference.

copperclock

kingstreet wrote: »

Current mortgage products are already reflecting a rate rise in November so doing this on 1 December will probably make little/no difference.

Thanks, yeah actually I thought that this might be the case. I'm just keen to jump as quickly as possible. We've decreased our LTV by over 10% in last 21 months so that should offset the slight rate rise for us.

Thrugelmir

copperclock wrote: »

I've no idea, to be honest. I just don't want to go through the hassle of a new mortgage application. I'm poised with my fingers on the keyboard ready to lock in a new product the second I am able to (which is 1st December so sadly not before BoE meeting on Thursday).

Are there any product free options worth considering?

copperclock

Thrugelmir wrote: »

Are there any product free options worth considering?

Yeah, good question. I have looked, but because our mortgage is large it works out cheaper to pay a fee and have a lower interest rate. So I think we'll either add it to the mortgage, or (cheaper still) pay it up front out of savings.