Booking mortgage 6m in advance - product fee

morgmonster

Our 5 year Santander mortgage is coming to an end early August 2024 so we are able to book a new rate now with Santander. Very happy with their 3.89% offer considering what we were facing a few months ago, but I'm curious about the £999 product fee.

Our plan was to pay the fee separately but I thought it wouldn't need to be paid until we lock into the deal 2 weeks before the remortgage date - actually it looks like it would need to be paid now to reserve the deal (which obviously makes a lot more sense). It isn't clear to me if we would get it back if we didn't end up going with this deal - I suppose it's more likely we would  be able to get it back if moving to another deal within Santander, but if we ended up moving to a new lender perhaps it is lost. So the obvious answer to me is to add it into the mortgage instead, but my husband thinks surely even in this scenario Santander would still want their fee to be paid if we didn't go ahead with the deal in the end? I've read through some of the T&Cs and am none the wiser.

Does anyone have experience of this? I've tried calling but don't have much time to spend on hold today so I'm asking here as well!!

Edit to add - we would pay off the product fee with an overpayment immediately, so the interest on that isn't really the issue, just that we don't want to lose £999 if we can help it! I feel like there's a slim to fair chance that rates may go down enough before August that we would be looking at other lenders.

ritz55

The way to do it, is to ask Santander to add it to the mortgage.

However with Santander I believe once you sign up to a deal even if not active, you can't change and will be locked into it with the ERC also due. Unless things have changed I got caught with this around 5 years back and couldn't move to a cheaper rate with them. 

morgmonster

ritz55 said:

The way to do it, is to ask Santander to add it to the mortgage.

However with Santander I believe once you sign up to a deal even if not active, you can't change and will be locked into it with the ERC also due. Unless things have changed I got caught with this around 5 years back and couldn't move to a cheaper rate with them. 

It has changed thankfully - it now says "Once you've accepted your new deal you can transfer to a new one with us or cancel up to 14 days before your new deal starts".
I've now clicked through to the stage where they have emailed me the offer and says it is valid for 14 days so we have some time to work it out. I just found an old thread from 12 months ago where the venerable dunstonh says that brokers usually recommend adding product fees into the mortgage as although they are non refundable, if you've not paid them yet by the time you cancel the deal then the issue is moot.

(I've just seen that the 3.89% 5 year fix has now disappeared online and been replaced by 3.99%.)