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The Property Podcast
ASK441: Is this fee too high? PLUS: Will leverage always be the answer?
Aug 13, 2024
Andrew, an expat investor, grapples with a hefty £5K mortgage arrangement fee while living abroad. He’s concerned this cost could undermine his interest-only mortgage strategy. The Robs offer insights into whether such fees are fair and how to manage financial implications. The conversation shifts to the future of mortgage loans potentially being linked to inflation, prompting a discussion about the stability of leverage in property investment. Can investors find balance amidst rising costs? Tune in for expert advice!
07:05
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Quick takeaways
- Mortgage arrangement fees, like the £5,000 quoted for overseas investors, should be evaluated relative to property value for better management.
- Leverage remains a crucial element of property investment, despite speculation on inflation-linked loans potentially affecting traditional banking practices.
Deep dives
Navigating High Mortgage Arrangement Fees
Mortgage arrangement fees have become a significant concern, particularly for overseas investors navigating the property market. For instance, a £5,000 fee may seem excessive, but its impact greatly depends on the value of the property being purchased. If investing in a property worth over £500,000, the fee is a smaller percentage of the total cost, making it more manageable. To mitigate costs, opting for longer-term mortgage products, such as five-year fixed rates, can be a strategic choice, as this helps to avoid repeated expenses associated with frequent refinancing.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode