Which of these fixes is cheaper?

FIRSTTIMER

How do I work it out? 80% LTV

2 Year Fix - HSBC - 1.64% with a £999 Fee 35 year term £144k

or

2 Year Fix - First Direct - 1.89% with a £490 Fee 35 year term £144k

AnotherJoe

Just use a loan calculator which will tell you how much interest you pay.

Google loan interest calculator or similar .
1. 45356 interest plus 999 = 46535 cost in total
2. 52950 interest plus 490 which is much more.


.. though a complication can ensue if you consider that you will remortgage in 2 years time


So the 35 year period becomes irrelevant and all that matters is how much interest plus fees you pay in those 2 years.
1. £144k@ 1.64% x 2 (roughly, ignore the little bit of capital paid off) = 4723+ 999 = 5722
2. £144k@ 1.89% x 2 = 5443 +490 = 5933


So 1 is still better by £200 or so.

FIRSTTIMER

Ahh okies, would factoring in paying fee up front or not make a big difference? Also, wondering what the capital will be in 2 years time, as ultimately, yes I will be remortgaging.

somethingcorporate

Paying a fee each time quickly adds up on short term fixes. You should look at doing a longer fix and factor in paying less (frequent) fees.

getmore4less

FIRSTTIMER wrote: »

How do I work it out? 80% LTV

2 Year Fix - HSBC - 1.64% with a £999 Fee 35 year term £144k

or

2 Year Fix - First Direct - 1.89% with a £490 Fee 35 year term £144k

2 year fix max saving is 2* 144k * (1.89-1.64) = £720

Difference in fee £509 max saving £212

Repayment the saving is smaller
If you overpay the saving is smaller.

Amount left after 2 years

£144,000 1.89% £469pm £138,081
£144,509 1.64% £469pm £137,890

£191 saving paying the bigger fee.

it makes a small difference if you pay the fee up front it is just like a £509 overpayment.

£143,491 1.89% £467pm £137,552
£144,000 1.64% £467pm £137,364

£188. saving paying the bigger fee

FIRSTTIMER

Thanks. Might just stick with my current provider (FD) instead of switching to HSBC