When buying a fixed rate mortgage - what does the term "Overall Cost For Comparison" mean?
Posted by admin | Under Fixed Rate Mortgage Tuesday Nov 11, 2008And how does this differ from the AER?
The overall cost is the total cost for the term of the mortgage.
That is 5,10,25 years.
It should show all costs for getting the mortgage any fees that are payable on completion of term etc.
AER is the annual equivalent rate which is interest rate that you will pay.
The for comparison is so you can compare the overall cost of the mortgage against any other quotes from banks, building societies who will have different overall costs.
If you have not any other quotes then it would be a good idea to get some particularly in these 'credit crunch' days - the quote you've got may be very good - on the other hand - you'll never know unless you look!
Regards
This means the total cost of the mortgage over the planned length of time. AER is based on a similar calculation but is the annual effective interest rate including all "extras" such as fees, redemption costs etc. OCC is quite useful to compare the total costs and is easier to understand.
References :
The overall cost is the total cost for the term of the mortgage.
That is 5,10,25 years.
It should show all costs for getting the mortgage any fees that are payable on completion of term etc.
AER is the annual equivalent rate which is interest rate that you will pay.
The for comparison is so you can compare the overall cost of the mortgage against any other quotes from banks, building societies who will have different overall costs.
If you have not any other quotes then it would be a good idea to get some particularly in these 'credit crunch' days - the quote you've got may be very good - on the other hand - you'll never know unless you look!
Regards
References :
Both are helpful when comparing loans offers from several banks, and in determining your annual costs and your total costs over the life of the loan.
References :