[Closed] Help with mortgage calculation

But is this also factoring in the balance with the fee added to mortgage is about £800 more at the end of the deal?

It's just paying the fee now vs paying it later.

The £55 difference is just the additional interest you pay for borrowing an extra £1k.

just going through this with nationwide, works out a bit differant for me as i owe quite a bit less. it gets a bit confusing but i've worked out adding the fee costs more than going with the no fee option, the no fee option is cheaper over 5 years but about £270 more over the full term.

yours is showing the £800 more you mention for the no fee option, fee added shows as £249 extra.

also i spoke to a mortgage adviser i know yesterday and he had a look but couldn't find anything else that was better by enough to be worth swapping away from nationwide( he did find something but with both me and my wife being self employed we had no chance of getting it)

About 3 re-mortgage iterations ago, I came to the conclusion that I would never get "the best" deal. A few hundred quid over the ife of a mortgage, even with 4 or 5 re-mortgages included, just isn't worth sweating over. Pick the one you fancy and get on with life. And what ever you do, do not keep looking after you choose. That way lies madness!!!

I just looked at those exact mortgages yesterday.

I went with Santander at same fee and 1.19% instead.

few hundred quid over the ife of a mortgage, even with 4 or 5 re-mortgages included, just isn’t worth sweating over. Pick the one you fancy and get on with life. And what ever you do, do not keep looking after you choose. That way lies madness!!!

Agreed. Someone much more experienced and highly paid than you came up with the rates/ fees that they did to ensure there is negligible difference. Just choose one and chill.

Agreed. Someone much more experienced and highly paid than you came up with the rates/ fees that they did to ensure there is negligible difference. Just choose one and chill.

That's a really irresponsible attitude.

You should absolutely be financially literate enough to understand what you're signing up for. Just shrugging it off as "someone else knows what they're doing" is how people get into trouble.

^^^

That sounds like the best advice, thanks!

( I meant just pick one and chilling, then I read the reply that was posted after I typed and back to square one 😄)

I think I'll go with fee added to the mortgage option as Ive got more important things that the upfront £999 should be spent on.

Hiya lenders offer £0 fee and fee options and the lowest cost option will depend on your loan size. As a rule of thumb £0 fee products with higher interest rates are cheaper on lower loan sizes , and £999 fee products with lower rate cheaper at higher loan size. The threshold between the 2 varies but usually in about £80 to £90k , that’s what the calculators on lender sites hope to show - hope that explanation may help, cheers

Aidy, you are spot on! Maybe my explanation was just a bit glib!

Meeeee, I think you have already shown that you have considered what's going on. I just meant life's too short to worry about a few quid when your looking at spending 150k or there abouts. I think thegenerlist was just saying don't worry, as well. I don't think he meant you are being irresponsible!

I’m with both Andy and Thegeneralist. Yes you should be financially literate, but also the mortgage market is that competitive and fluid that there is negligible difference (ie you pay the expected curve plus capital charge if you fix for longer).

Some people value the piece of mind of being fixed, some don’t.

I think I’ll go with fee added to the mortgage option as Ive got more important things that the upfront £999 should be spent on.

i've just gone for that one, had a better look at it and that is slightly better than no fee and like you that £999 will be better spent on the house at the moment.

there is not that much between all three options really and at £91k that ties in with what achaney says above.

The no fee option looks to me* the worst of all worlds unless you are intending to remortgage before the 5 years is up. If you are then you need more calculations doing.

If you go no fee then you pay £644 more interest and owe the bank £638 more after 5 years than if you paid the fee up front as you will have paid off less of the mortgage.

If you add the fee into the mortgage then after 5 years you will pay £55 more interest and will still effectively owe the bank £754 of the fee.

If you stick at the same mortgage rate for however many umpteen years left you pay an additional £249 adding the fee into the mortgage. That is effectively the cost of borrowing a grand for umpteen years. If umpteen is about 20.75 years then that's about a pound a month for umpteen years (very very roughly).

If you are short of cash it doesn't look a bad option but is extending your borrowing and hence if you ever wanted to move to a more expensive house you could extend your extra borrowing by about a grand less. If you have spare cash in the bank you need to decide whether to pay up front or keep the cash for a rainy day fund (or a new bike 🙂 )*

Note not financial advice but my way of considering this type of thing.

That’s a really irresponsible attitude.

You should absolutely be financially literate enough to understand what you’re signing up for. Just shrugging it off as “someone else knows what they’re doing” is how people get into trouble.

But it's completely obvious that the OP has put s lot of thought into this and come to a reasonable conclusion. He's now getting to the point where he's sweating a level of detail that is pretty much irrelevant.
I'm not saying don't think about it. I'm saying don't overthink it, like I would 😝
OK, given that you disagree, what would your suggestion be to ensure that OP gets this exactly right?

<Edit>achaney is spot on :

Hiya lenders offer £0 fee and fee options and the lowest cost option will depend on your loan size. As a rule of thumb £0 fee products with higher interest rates are cheaper on lower loan sizes , and £999 fee products with lower rate cheaper at higher loan size. The threshold between the 2 varies but usually in about £80 to £90k , that’s what the calculators on lender sites hope to show

And what slowol said also looks pretty much identical to what I have concluded the last four times that I did this exact calculation on Nationwide mortgages ( but at ~7.4% then 5.75% then 3.79% then 1.79%)

Which in itself is quite a scary thought if interest rates revert)

I've done the detailed calculations on this numerous times, both by using the cumprinc cumint and various other Excel formulas, but also by creating a spreadsheet with 300 rows and taking off the payments and adding the interest each month to see which goes to zero first. I looked at so much detail because I found it interesting and love numbers.
And in the process I found that for Nationwide mortgages the difference in overall cost was negligible. Hence I don't think the OP should worry about it too much at this stage beyond what he already has.

I’ve done the detailed calculations on this numerous times, both by using the cumprinc cumint and various other Excel formulas, but also by creating a spreadsheet with 300 rows and taking off the payments and adding the interest each month to see which goes to zero first. I looked at so much detail because I found it interesting and love numbers.

That's nothing. On a long distance flight once I created a spreadsheet to prove how much cash/savings I'd need to make an offset mortgage work, month by month over 25 years after one of my Team Leaders had reckoned that his would pay his mortgage off in half the time.

Answer - he was talking rubbish and hadn't actually worked out the sheer value of savings you'd need to offset the increase in the rate.

Probably too late, but one thing to note is no fee mortgages are sometimes no valuation fees as well as no arrangement fees. This extra couple of hundred was enough to make them the best deal for me last time i looked