WHY HIGH MORTGAGE FEES MAY SOMETIMES BE WORTH PAYING
THE AVERAGE FIXED MORTGAGE ARRANGEMENT FEE IS NOW AT ITS HIGHEST POINT SINCE AUGUST 2013, ACCORDING TO ANALYST MONEYFACTS. BUT IT IS SOMETIMES WORTH PAYING A HIGHER FEE TO GET A ROCK-BOTTOM MORTGAGE RATE, DEPENDING ON YOUR PARTICULAR MORTGAGE.
Borrowers must remember that there is more to a mortgage than the rate of interest. The total cost – rate plus all fees – must be calculated so that you can compare mortgages on a like-for-like basis. Better still, ask an independent whole-of-market mortgage broker for assistance in finding the right mortgage for your circumstances.
Generally speaking, lenders offering rock-bottom rates may charge a higher fee in order to make the pricing commercially viable. However, that doesn’t mean you should always avoid high fees because you may get a very cheap rate. Whether it is worth paying the high fee in order to get the cheap rate or not will depend on the size of your mortgage. As a general rule, the bigger the mortgage, the less important the fee and the more important the rate.
Remember you can always add the fee onto the mortgage if you don’t have the cash to pay upfront but you will pay more in the long run because you will be charged interest on top.