I think you'll find Adrian is right and you need to find the other fees as well.

But generally the £2500 HLC is adding over £100 pm to your repayments over two years.

It doesn't look like that because you have spread the repayments over 35 years,so instead it is increasing the outstanding capital as you have twigged.(most people never spot that they just look at monthly repayment)

Whilst HLC's are a bit of a con, they do allow lenders to lend more money than they usually would.

So if you could only afford £844 pm and not £870 you would be grateful that Natwest would lend you the money, irrespective of the future cost.

You should remember that your house is security for your loan. If you default on repayment and arrears build up the chances are the mortgage company is going to get back less after auctioning the property than you owe them. At which point it makes them look pretty stupid having taken the security of an asset thats now worth less than the loan.

In all other business deals banks offer loans of between 65 - 80% of the value of the security. If they did that with houses very few people would own houses now. ( But they would be cheaper, so it is the banks fault after all!!)

Thanks alot for your good advice :)

I sat down and did a bit of number crunching and also think i would be better off with the IF one.

I have the two key facts infront of me, the IF one has a table of the payment schedules under section 15 but the natwest one dosnt have a section 15. To be honest I have found natwest to be less than helpful and they offer an very un-personal service from which you are pushed from pillar to post. This alone has made me want to chose IF over them.

But anyway, cutting to the point, I ended up going for the IF offer due to the HLC. I think the whole HLC idea is quite unfair and is not helping first time buyers at all.

Thanks again.
Lee

Hi again

It's not a no brainer - the different in interest charged is £2160ish so you'd need to look at the booking fees, but my gut reaction is that the IF deal is better since you'll owe less in 2 years and the payments are similar (the term, I know)

Natwest are completely wrong - the last page of their illustrations gives you the figure.

I can provide these exact figures and run the comparison - I don't charge a fee - by all means give me a call/e-mail.

Adrian

Hi I have two mortgage offers...

£166,250 @ 95% LTV (£175,000)

Natwest
4.89 fixed for 2 years over 35 years
HLC = ~£2500 (added to mortgage)
Monthly repayment: £844.00

Intelligent Finance
5.54 fixed for 2 years over 39 years
HLC = N/A
Monthly repayment: £870.00

Now, considering I will b e remortgaging over the 2 years which of these are better? Does the fact there is no HLC with IF.com make it better than the low rate Natwest that does come with the HLC? We are really confused and need to make a decision asap.

EDIT: Can anyone tell me if this is true because I find it hard to believe. Natwest have just told me they cannot tell me how much I will owe them (the balance) after 2 years of fixed rate payment? This sounds ridiculous to me? surely its a simple calculation?

Many thanks for your time