Barclays 7 Year fixed rate - Fee query and some insight please.

Mr.Plinky

Hi
Just checking the site and you are reporting the Barclays 1.49% 7year fixed as £35 set up fee.
https://www.moneysavingexpert.com/mortgages/best-buys/?journeyType=remortgage&propertyValue=350000&mortgageAmount=260000&term=18&introTypes=FiveYearsPlus&introTerms=Fixed&repaymentMethod=Repayment&sortBy=MonthlyRepaymentAmount&pageNumber=1&addFeeToBalance=true&productNoFee=false&noEarlyRepaymentCharge=false

Visiting the Barclays website I can see set up fee £999 and £749
https://www.barclays.co.uk/mortgages/fixed-rate-mortgage/


Which is reflected in there charge sheets from 26/05 
https://www.barclays.co.uk/content/dam/documents/personal/mortgages/CoreRangeCustomerRateSheet.pdf
Im I right to assume the charge has increased since the website and live mortgage checker was last uploaded (prior to 26/05) or am I missing something?
Also a second question. We are seeking to do a further advance circa 80-100K, existing mort £140K so circa £240K remo on a property with an AVM range £340K-380K.
We have a year left with current lender of a 5 year and the early redemption fees are £2384.52.
New Product fee = £749
Total costs to set up = £3133.52
The current mortgage rate is 1.99% so my calculations I think doing this in laymans terms on the existing mortgage capital balance when remortgaing (disregarding the additional borrowing), calculate the risk over the year by coming out of the current product early.
£139K x 1.99% current interest rate payment = £2766.10
£139K  1.49% new interest rate payment = £2071.10
Interest payment savings over the year = £695
So in short the rough variation is a cost to ourselves pf setup cost £3133.52 (of which £749 will be added to the mortgage balance),
If I am to discard the setup fee as paid over the term of the mortgage = £2384.52 early redemption less £695 = £1689.52 is what we would be paying to come out early.
So my thought is the lender (not all but current one will), once application is accepted the offer is valid for 6 months, as we are not in a rush for the FA money at this stage it makes sense to wait as this would hopefully reduce the early mortgage redemption fee thus saving money.
Our key concern at this stage is that rates potentially increasing, can see trackers are and the economy appears to be challenging ahead.
In short (minus the crystal ball and rates, unless anyones got a good view on this) despite the cost, is it a shrewd move?
Should we wait?
Or proceed, wait 6 months see if the lender would be willing to extend so milk it if possible.
If not review what other products are out there in 6 months time and if there is nothing better take the current lenders offer.
Thanks for reading and any help appreciated.

getmore4less

Barclays £999/£749  fees on their 7 year rates have been there for a long time, they are not new..

Do you qualify for premier remortgage rates?

you can't trust the MSE checker anyway it does the calculations wrong for the comparisons and does not allow you to pick your comparison term


will do it based on the 18y term  in your link but if you plan to overpay this will change
assumptions £140k,  LTV<60%  ERC  £2385 product fee £749

Add all the fees(£3134) and make the payment the same look at amount owing after 1 year.

amount	rate	payment	owing	interest
£143,134.00	1.49%	£771.68	£135,957.68	£2,083.82
£140,000.00	1.99%	£771.68	£133,466.48	£2,726.62

will leave you owing  £2491 more.
what does that mean against  waiting? 
well you could look at a 5y fix as a follow on based on 17years.
You would still have 6 years on 1.49% so lets look that that for 5years
compare to with and without £1k fee( net -£1491 and -£2491  to leave the same amount after 5 years to get a breakeven rate.

amount	rate	payment	owing
£135,958.00	1.49%	£768.00	£98,657.83
£134,467.00	1.75%	£768.00	£98,634.14
£133,467.00	1.93%	£768.00	£98,641.22

The current Barclays rates for 5y are
1.24% £999 fee  (0.5% built in margin, switch and save))
1.63% £0 fee   (0.3% built in margin, great escape)

By paying the ERC fee you are in effect betting the rates will go up by more than 0.5% in the year(a bit more as you have that extra year on the 7y option)

Rates have been dropping although I can't see this 7y rate changing much it is aimed at 75% LTV retentions at 60% LTV the 5y tend to be the better choice.
.
That 7y also comes with hefty 5% ERC for full term

AVM range £340k-£380k 75% £255k-£285k 60% £153k-£228
Given you are also looking for extra borrowing if you can't get below 60% but can keep the total in the 75% LTV bracket then the Barclays 7y 75% becomes more attractive as 75% rates tend to be higher.
(might have to use the track and switch option if not a Premier Exclusive customer).

Does your ERC drop anytime soon or is it at the bottom?

The other thing here is as you main concern is rates going up then you have to factor in delaying the extra borrowing at higher rate.

A point to remember is you can't ignore the time of money if you have a fee up front then you have to include all of it you can't spread it over the fixed period or full term same with payments if they are different you have to factor in what is happening to the difference.

That's one of the errors in the MSE calculator

Mr.Plinky

Thank you. With the existing mortgage balance, house value (Im using a mid range of the AVM figure from hometrack) and the additional we will need circa £100K, I believe the 60% is out of our reach, hence the 75%.
Have spoken with Barclays and they have not told us we are not eligible for the premier rates.
Yes you are correct we are almost betting against rates over the coming 12 months, hence why sitting on the fence but also want to grab a deal as rate is lower than our current lender.and with trackers going up, coupled with concerns all be it a little on the pesimistic side that rates will go up. Maybe Im wron, just the nature of the market I guess.

getmore4less

The nature of the market is clinch the deal so the message is always rates are going up.
its been like this for years even when rates were high and the trackers were at base rate + tiny% everyone was flogging fixed deals because rates will go up.

There have been very few windows where a fixed deals saved much money, a few got lucky getting in just before a rise.

Even with brexit and covid most of the lower LTV rates stayed low and for the last few months fixed rates have been dropping small amounts at the lower end but as confidence returns the higher LTV are creeping down as well.

On those numbers there is quite a difference between
better fix now rates might go up  
better fix now rates will go up more the 0.5%

Mr.Plinky

Thanks for the info. It all went south from the initial fact find and dip with Barclays to the acutal MC meeting.
The biggest impact was the workplace childcare vouchers, whilst we intended to stop these as that would coincide with our child starting school, we would need to prove at least 2 months with minimal payment or come out of the scheme totally which is not really something we would choose to do yet. The childcare vouchers would be nulled and replaced by the additional boworring higher mortgage payments which equate the same. 
So, as they say, go with the flow. We are waiting, cancelled the voucher scheme 3 months prior to our current rate ending and then reapply without the ERC. So Im simply monitoring the rates and walking away from the table for now.
Thanks for you info and replies. 
As a footnote re products and charges, I thought the MSE comparisson tool was reliable. Lesson learnt. Always do your own leg work

Mr.Plinky

Okay so an update - we complete by eom and ended up with Halifax 5yr fixed @1.78% with and additional £100k (£1k set up fee and broker who we previously used for just under 200). After all the hassle with Barclays felt it was the better direction, less hassle and time - too busy with both working and kids etc.
So not too bad after all, looking today would've been circa 2.5%.
Only fly in our ointment was the childcare voucher payments from salarie so all good.
Will be holding on to the money in a 1.5% JPM account until we can get a reliable, decent and price honest contractor etc! 
Wish us luck please - as the current financial climate is really devalued that £100k huh.