Remortgage deals - Fee or No Fee

Toolman2001

my current fixed rate deal comes to an end in April.

I want to stay with my current Lender Birmingham Midshires, I have ask a broker to compare rates, however I don't feel fully informed about the rates and fees.

Choices as I see are…

2 yrs fixed @ 3.07% with 3% fee (Payments £342 pm)

5 yrs fixed @ 3.86% with 3% fee (payments £430 pm)

5 year fixed @ 4.48% with no fee (payments £485 pm)

while the lowest monthly payment is very attractive to me right now, I am concerned about the 3% fee (£4k) being added to the debt. The advisor didn't seem to share concern.

As this is a Interest only mortgage am I right to be concerned that the fee is adding to the overall debt or have I got this completely wrong and the lowest rate and monthly payment would be the best option?

I feel a 5 yr fix is better in the current climate and I want some certainty right now.

Loan £130k LTV 47%.

Thank you for any advice.

Woodstok2000

Comparing the 5 year deals, the lower rate adds £3900 to the mortgage, but you pay £3300 less over the 5 year term. I'd go for the higher rate with no fees as youre better off by £600.

ACG

Its a small loan and a large fee. I imagine in the long run it is better to go with a deal without fees.

But difficult to say without seeing those products.

Toolman2001

https://forums.moneysavingexpert.com/discussion/comment/81858941#Comment_81858941

Does that take into account the fee being added to the loan ?

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81859041#Comment_81859041

Yes.

Lower rate you pay £25,800 over 60 months and your end balance is £133,900.

Higher rate you pay £29,100 over 60 months (£3,300 more) and your end balance is £130,000 (£3,900 less).

If you took the lower rate, and can invest the £55 per month at over 4% interest, you'll end up better off overall but the difference is minimal and so I would be tempted to go for the higher repayments.