Higher Interest no fee vs lower interest hight fee

[Jordan210]

I have massively confused myself looking at mortgage and need some help. (can tell its been a long day can't even spell high)

For example on a 2 year fixed deal.

Is it better to pay a high upfront cost with a lower interest rate or a higher interest rate with no fee.

Should I be looking at the total payment including product fee or just interest rates ?

Edited by Jordan210 on Monday 6th March 21:49

[Scawie]

Moneysaving Expert's comparison tool gives you the average cost per year over the fix period with any fees and cashback taken into consideration. Gives you a pretty straight comparison.

[Jordan210]

Scawie said:

Moneysaving Expert's comparison tool gives you the average cost per year over the fix period with any fees and cashback taken into consideration. Gives you a pretty straight comparison.

Thats what iv been looking at. But now not sure whats better.

As to me it seams like swings and roundabouts. But I could be missing the point

[Sarnie]

Jordan210 said:

Thats what iv been looking at. But now not sure whats better.

As to me it seams like swings and roundabouts. But I could be missing the point

The higher the balance the more likely that a product with the lowest possible rate with a fee will work out cheaper.

A low balance (under £100k for example) will out yield that having a higher rate and low/no fees work out cheaper.

There is a natural tipping point. Add up all fees plus x24 monthly payments......the total will tell you which is cheapest.

But naturally, these are not the only considerations when choosing a product..........

[Jordan210]

Sarnie said:

The higher the balance the more likely that a product with the lowest possible rate with a fee will work out cheaper.

A low balance (under £100k for example) will out yield that having a higher rate and low/no fees work out cheaper.

There is a natural tipping point. Add up all fees plus x24 monthly payments......the total will tell you which is cheapest.

But naturally, these are not the only considerations when choosing a product..........

Will call you tomorrow ! my heads spinning with numbers

[frisbee]

There was a threshold for the higher fee, lower interest mortgages when I was looking e.g. over £200k mortgage.

[Scawie]

Jordan210 said:

Thats what iv been looking at. But now not sure whats better.

As to me it seams like swings and roundabouts. But I could be missing the point

The total cost assessment gives you a pretty decent straight comparison. You can click the popup to see how it's calculated.

[TartanPaint]

Here's a good spreadsheet for comparing outcomes on two mortgages side by side.

http://www.locostfireblade.co.uk/spreadsheet/Index...

I found it through google, but from the website it looks like the creator is a bit of a petrolhead too, so might even be on here?

[shep1001]

There are people on here who are more qualified than me to answer but I have just done my mortgage. On the amount I borrowed for the fixed period I did, I was better off taking the higher interest rate with no fee. It was easy to work out. I guess this will vary based on individual circumstances. If you are using a broker, they should help you with this?