--- title: This Common Product Fee Mistake Can Cost You Thousands description: Discover why adding mortgage product fees to your loan can cost thousands more over the full term. Learn how lenders use psychology, compare fee vs no‑fee options, and avoid common mistakes when calculating true mortgage costs. image: https://www.overcomemortgages.co.uk/hubfs/adjusted%20blogger-Oct-08-2025-09-34-29-7933-AM.png --- [Skip to content](https://www.overcomemortgages.co.uk/en/blog/this-common-product-fee-mistake-can-cost-you-thousands#main-content) [![](https://www.overcomemortgages.co.uk/hs-fs/hubfs/overcome_ai_adjusted-removebg-preview.png?width=285&height=100&name=overcome_ai_adjusted-removebg-preview.png)](https://www.overcomemortgages.co.uk/) Overcome Mortgages Navigation [Home](https://overcomemortgages.co.uk/) [Blog](https://overcomemortgages.co.uk/en/blog) [CEMAP Quiz](https://overcomemortgages.co.uk/cemap-quiz) [CheckMyFile](https://overcomemortgages.co.uk/checkmyfile) [Contact Us](https://overcomemortgages.co.uk/contact-us) [Home](https://overcomemortgages.co.uk/) [Blog](https://overcomemortgages.co.uk/en/blog) [CEMAP Quiz](https://overcomemortgages.co.uk/cemap-quiz) [CheckMyFile](https://overcomemortgages.co.uk/checkmyfile) [Contact Us](https://overcomemortgages.co.uk/contact-us) ![](https://www.overcomemortgages.co.uk/hs-fs/hubfs/adjusted%20blogger-Oct-08-2025-09-34-29-7933-AM.png?width=1239&height=700&name=adjusted%20blogger-Oct-08-2025-09-34-29-7933-AM.png) # This Common Product Fee Mistake Can Cost You Thousands ![Isaac Barco](https://7528315.fs1.hubspotusercontent-na1.net/hub/7528315/hubfs/raw_assets/public/mV0_d-cms-elevate-theme_hubspot/elevate/images/avatar-placeholder.jpg?width=48&height=48&name=avatar-placeholder.jpg) Isaac Barco October 7, 2025   As a mortgage broker, I know full well lenders want to make money. With many lenders now offering extensive product ranges, with and without fees this is another way, with powerful psychology that lenders end up getting you to unknowingly pay more on your mortgage Let’s take an example: Term: 20 years Balance: 200k Product length: 2 years Lower rate: 4.10% with a £995 fee Higher rate: 4.36% with no fee This would Produce Monthly Payments: 4.36% no product fee: £1,250 4.10% 995 fee added to the loan: £1,229 4.10% 995 fee paid up front: £1,223 It’s at this point where many people make a mistake as they calculate it in the following way: 4.36% — No product fee | Monthly Payment: £1,250 | Total Over 24 Months: £30,000 4.10% — £995 fee added to loan | Monthly Payment: £1,229 | Total Over 24 Months: £29,496 4.10% — £995 fee paid upfront | Monthly Payment: £1,223 | Total Over 24 Months: £29,352 From this it seems that adding the fee to the loan would be most cost effective when in fact this can end up charging you the most interest.  To work out the true cost we need to calculate over the entirety of the mortgage term, taking in to account a reversion to the no fee rate once the product expires. Here are the figures accordingly: | **Year** | **Balance — No Fee (4.36%)** | **Balance — Fee Added to Loan (4.10%)** | **Balance — Fee Paid Upfront (4.10%)** | | --- | --- | --- | --- | | **0 (Start)** | **£200,000** | **£200,999** | **£200,000** | | **2** | **£190,699** | **£191,590** | **£190,450** | | **5** | **£170,899** | **£171,800** | **£170,600** | | **10** | **£123,400** | **£124,300** | **£123,100** | | **15** | **£66,300** | **£67,200** | **£66,200** | | **20** | **£0** | **£0** | **£0** | | **Total Cost over 20 years** | **£300,523** | **£302,742** | **£300,473** | As consumers we get drawn in by the lower monthly payment of adding the fee to the loan, overlooking the fact we will be charged interest on a higher balance for the entirety of the mortgage term- what we thought was saving money, ends up costing over £2000 more! **Key Takeaways** - Lower monthly payments don’t always mean lower total cost-adding a product fee to your loan increases your balance, so you pay interest on it for the entire mortgage term. - Short‑term comparisons can be misleading ## Share this post [mailto:https%3A%2F%2Fwww.overcomemortgages.co.uk%2Fen%2Fblog%2Fthis-common-product-fee-mistake-can-cost-you-thousands](mailto:https%3A%2F%2Fwww.overcomemortgages.co.uk%2Fen%2Fblog%2Fthis-common-product-fee-mistake-can-cost-you-thousands) ## Keep reading ### [You can get an interest‑only mortgage without a standard repayment vehicle](https://www.overcomemortgages.co.uk/en/blog/you-can-get-an-interest-only-mortgage-without-a-standard-repayment-vehicle) ### [Worried Your Credit Will Stop You Getting A Mortgage?](https://www.overcomemortgages.co.uk/en/blog/worried-your-credit-will-stop-you-getting-a-mortgage) Overcome Mortgages is a trading name of CS Financial Group Limited, registered in England and Wales. Registered address: 10/12 Woolpack Yard, Kendal, LA9 4NG. Company Registration Number: 10731629. CS Financial Group Limited is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority The information on this website is for the use of residents of the United Kingdom only. No representations are made as to whether the information is applicable or available in any other country which may have access to it. Copyright 2025 Overcome Mortgages [Privacy Policy](https://www.theopenworkpartnership.com/privacy-notice/)· © 2025 Overcome Mortgages. All rights reserved. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Isaac Barco", "url" : "https://www.overcomemortgages.co.uk/en/blog/author/isaac-barco" }, "dateModified" : "2025-11-14T12:06:57.952Z", "datePublished" : "2025-10-07T19:19:08.000Z", "headline" : "This Common Product Fee Mistake Can Cost You Thousands", "mainEntityOfPage" : { "@id" : "https://www.overcomemortgages.co.uk/en/blog/this-common-product-fee-mistake-can-cost-you-thousands", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.overcomemortgages.co.uk/hubfs/c0458d09-0e73-4f70-a327-65f398b39309.jpg" }, "name" : "Overcome Mortgages" } } ```