Should I add fees to my mortgage?

When choosing your mortgage product, some deals will come with a product fee. This is essentially just the price tag attached to the mortgage. A typical product fee is around £1000, but can be more depending on the product you choose. Most of the time, you do have the option to add this fee to the mortgage loan and so the question is raised: should you do this?

We would always say yes, and here is why:

A product fee is usually payable up front, and on top of all of your other expenses like solicitor’s fees and house removals, another £1000 is quite a large commitment. If for any reason your application doesn’t go through or doesn’t complete, there is then the added stress of trying to get that money refunded. You don’t want that, and we don’t want that for you either.

If you are in a position to be able to pay the money up front, we suggest adding the fee to the loan initially, and then once the mortgage has completed, pay it in full in your first month. The benefit to doing this, if you can, is that you will avoid paying any interest on the fee, and also avoid having to part with the money before completion.

Your other option is to not pay it at all and just leave it attached to the mortgage, effectively allowing you to pay it off monthly like the rest of the loan. But just remember, if do this you will pay interest on the fee at the same rate as your mortgage.

It is important in any situation to know what your options are and how each of those options will affect your mortgage and monthly repayments, so speak to an advisor to find out more!