Product fee and eventual cost

MrCH

getmore4less wrote: »

You need to compare over the fixed period not the full term.

the simple way and gets the best/easiest answer is to add the fees and make the payments the same,



left after 5 years
£126,000 3.74% £605pm £112,017
£126,999 2.81% £605pm £107,208

but you should get
£126,999 2.40% £605pm £104,647

Even with a broker fee you will save loads.

if you moved to one of the 2.3% rates and if we start with the £999 fees and £1,500 fees

£126,999 2.30% £605pm £104,031
£127,600 2.30% £605pm £104,593

that means you have around £500 to switch lender if you can get a 2.3% rate.


there are more factors like what the follow on rates are and what rates the new LTV can get you which could sway the choice

eg Nationwide have 2.39% £999 fee valuation and free legals or £500 cashback
there may be other fees to consider like your natwest discharge and money transfer that will eat into any saving.

Thank you for the working outs getmoreforless
Did you do the working outs yourself or is there a website I could use to calculate future figures?

ACG wrote: »

I can only speak personally but we do product switches with the same lender for free where the balance is £100k(ish) plus. The commission covers us for the 2-3 hours work it takes.

amnblog wrote: »

We too will handle these product transfers without Broker Fee if not a really small balance of under say £60,000.

Underneath that it is not worth picking up the risk on the Advice.

A Broker seeking £300 to do a NatWest switch is doing well out of it.

Thankyou for the info ACG and amnblog.
The £300 payment to the broker was back in September 2017.


Do you know if the Natwest deals via a broker are for existing customers? I seen nothing in regards to an exclusion for existing customers when on the MSE comparison tool.


I guess if going through a broker for the product switch as an existing customer would not require any affordability checks the same as doing the product switch myself?


Thank you for your time, I appreciate it a lot.
I could have quite easily switched this morning but if I do go through a broker I could save quite a bit, helps with having recently had a new born

getmore4less

MrCH wrote: »

Thank you for the working outs getmoreforless
Did you do the working outs yourself or is there a website I could use to calculate future figures?

I Have a spreadsheet which has a lod of calculation/comparison options.

For simple one offs I use

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

Mortgage are simple as there are only 4 variables to work out a full term
Amount,rate,term,payment

Amount is really 2 numbers start and end, for full term end is zero

You only need 3 to do any calculation that give you the 4th

You stick your 3 numbers(amount,term,rate) in and get the payment

when you want to work out a different ending like after a fix period you use the 4 numbers to get the 5th non zero end.

Change to interest only and stick the amount, rate, fix period, payment and it tells you what's left after the fix period.


To make the easy comparison you add fees and make the payment the same.

if you pay the fees up front you barrow less on the no fee version to make the starting point the same.
make the payment the same to keep the same cashflow and not have to account for the difference in payment.

ACG

See what your broker can get you by doing a product switch with them, if it is the same as doing it yourself, you have a choice. If it is cheaper, then it is a no brainer.