Product fee

mummygray

I think I know the answer to this question but want to check I’ve thought it through correctly!
If I renew my mortgage to include the product fee, I get a lower rate. So can I lock in that deal and then make an immediate overpayment for the product fee amount (to be allocated against the capital).
EDIT-I don’t think I was quite ‘with it’ when i thought about this! I just pay the product fee upfront, duh!

gjcody

mummygray said:

I think I know the answer to this question but want to check I’ve thought it through correctly!
If I renew my mortgage to include the product fee, I get a lower rate. So can I lock in that deal and then make an immediate overpayment for the product fee amount (to be allocated against the capital). Thank you 

Indeed, that is the normal way. Just 2 minor points:

Lenders tend to automatically reduce your monthly payments if you pay off lump sums; ensure they do not do this as it rather defeats your aim.

If you are in the habit over-paying, ensure you deduct this amount from you permitted limit so as not to accidentally incur any Early Repayment Charge.

Emmia

gjcody said:

mummygray said:

I think I know the answer to this question but want to check I’ve thought it through correctly!
If I renew my mortgage to include the product fee, I get a lower rate. So can I lock in that deal and then make an immediate overpayment for the product fee amount (to be allocated against the capital). Thank you 

Indeed, that is the normal way. Just 2 minor points:

Lenders tend to automatically reduce your monthly payments if you pay off lump sums; ensure they do not do this as it rather defeats your aim.

If you are in the habit over-paying, ensure you deduct this amount from you permitted limit so as not to accidentally incur any Early Repayment Charge.

When we've paid a fee, we've done it separately, as there was the option to do so. The fee wasn't added to the mortgage first. We're with HSBC.