Product fee

Abzinthe

Hello. I am looking to pay off the remaining mortgage balance in 2 years time (2021). The current balance is approximately £57.5K. I have a couple of 2-year products to choose from but I'm not sure which one would work out better.
I could choose a 1.61% rate with a product fee of £995 (approx £308 p/m) or a 2.25% rate with no fee(approx. £336 p/m)

How would I calculate which works out better over 2 years? Do you end up paying more for the lower rate and by how much?

Thanks

phillw

Abzinthe wrote: »

How would I calculate which works out better over 2 years? Do you end up paying more for the lower rate and by how much?

In terms of how much you're paying to the mortgage provider, I make it £8387 for the fee vs £8064 without a fee. However you will still owe the balance at the end and it'll probably be different, I don't know how to calculate that. I think there is a calculator somewhere that does it.

Abzinthe

Thanks for your reply Phil,
There are two calculators that I've found here: (can't post direct links btw)
thisismoney.co.uk/money/mortgageshome/article-1633400/Mortgage-calculator-Compare-true-cost-rates-fees.html

And here: moneysavingexpert.com/mortgages/compare-mortgage-rates/

Using the 1st link gives a difference of around £580 in favour of not paying a fee.
However, the MSE calculator gives a difference of £280 in favour of paying a fee. So I'm a bit confused.

Most likely I'm doing something wrong but I have checked the numbers again. I'm assuming that the mortgage term is how many years of the mortgage I have left ( in this case 18 years remaining)