Is this shockingly bad advice from MSE, or am I just misunderstanding?

davemorton

The figures just dont make sense to me, am I misunderstanding something here, as when I was looking at the various mortgages, with the figures they have here, I was not getting the same results.

https://www.moneysavingexpert.com/news/mortgages/2018/07/four-in-10-mortgages-now-fee-free---but-dont-get-sucked-in?_ga=2.46490990.832995056.1532774026-1747085855.1503776928&_gac=1.58644184.1529749009.Cj0KCQjw37fZBRD3ARIsAJihSr3PA1NBhIYY9cJP9OKwpscKE6G4GihIOPNcGaY2MKZ3v73mgQREfucaAh_mEALw_wcB

ACG

I have only skimmed through it, but is there any advice other than to just check whether fee free or paying a fee is the better choice?

middleclassbutpoor

The information is sound, the table is confusing people because;

- Its not clear that the initial charges have been added to the loan.
- The calculations are slightly off but the principle of the fee free mortgage being more expensive than the others still remains.

Very simply - nothing new here and I would imagine anyone looking at a mortgage would look at the total costs over the period of a deal to work out which is the most cost effective?

davemorton

middleclassbutpoor wrote: »

The information is sound, the table is confusing people because;

- Its not clear that the initial charges have been added to the loan.
- The calculations are slightly off but the principle of the fee free mortgage being more expensive than the others still remains.

Very simply - nothing new here and I would imagine anyone looking at a mortgage would look at the total costs over the period of a deal to work out which is the most cost effective?

Yes, it was the table that confused me. When I was researching mortgages, I added up all the payments for the 2 years, added on the fee's, and looked to see which one worked out the cheapest for the 2 years, but with the figures in the table, doing it my way, I would have chosen the worst product.

getmore4less

no misunderstanding

they got so much wrong in the article, they recommended the wrong deal


but


adding the payments and the fees is also wrong when comparing deals

since the first draft published 16th they have added a 6th deal and change the numbers without saying thy changed it

(I need to recheck but I think they still have it wrong from the quick look)

This thread has the original post details and the reasons why it was(and still is) wrong

https://forums.moneysavingexpert.com/discussion/comment/74578244#Comment_74578244

the new article numbers

1.43% £1,700 £602 £14,442
1.44% £2,034 £604 £14,491
1.54% £1,176 £607 £14,577
1.64% £0,534 £612 £14,684
1.76% £0,200 £619 £14,854
1.89% £0,000 £628 £15,073

As you can see, the two cheapest mortgages over two years have the two most expensive fees

adding the new deal to the sanity test numbers
(rate difference * amount borrowed *2 which is the BEST savings you can get for the rate and fee over 2 years)

fee, rate difference, interest saving over 2 years , net savings.
£1,700 0.46% £1,380 -£320
£2,034 0.45% £1,350 -£350
£1,176 0.35% £1,050 -£126
£0,534 0.25% £0,750 +£216
£0,200 0.13% £0,390 +£190
£0,000 0.00% £0,000 +£000

The three they have last are the best 3.

[STRIKE]Could not be more wrong if they tried [/STRIKE]

The three they say are the best don't even cover the fees in the 2 years leaving you with a bigger debt.

You pay around £10pm or £240 less over 2 with the £1,700 fee deal over the best £534 fee deal but are left with £830 more debt(see other thread).

That's £600 worse off after 2 years.